Microsoft, too, has made massive cuts to its public sector workforce. The company is in the process of laying off an additional 9,000 staff as it undergoes further restructuring. This decision, which affects less than 4% of the company’s global workforce, comes on the second day of Microsoft’s 2026 fiscal year. At the time of writing in June 2024, Microsoft had about 228,000 people on different teams, geographies, and experience levels.
The company has a historical pattern of frivolously laying off workers. 10,000 employees in early 2023, followed by cuts of more than 6,000 jobs in May and at least 300 more in June. These most recent layoffs follow a round announced in January. At that time, Microsoft reduced its workforce by under 1% according to performance ratings.
Microsoft’s executives have long made the case for simplifying the company’s many moving parts. There’s a goal to decrease the number of management levels between ICs and C-suite execs. This department restructuring is designed to foster improved communication and strategic agility across the organization.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.” – Microsoft spokesperson
In conjunction, the company guided to approximately 14% year-over-year revenue growth in the June quarter. To achieve this aim, it is zeroing in on cutting the size of the workforce. Microsoft isn’t the only one predicting a boom in that future. This expansion will be largely fueled by its Azure cloud services and growing subscriptions to its corporate productivity software.
Microsoft shares were down roughly 0.6% at opening of Wednesday’s trading session, despite the news of layoffs. In the meantime, the S&P 500 index continued to consolidate within a narrow trading range. Microsoft has had a long-standing practice of announcing major reorganizations at the kick-off of new fiscal years. This announcement is completely consistent with their long-time modus operandi.
As Microsoft navigates these changes, it remains committed to adapting to market dynamics while striving for sustained growth and innovation in its offerings. The company remains committed to executing against its strategic priorities while ensuring appropriate management of its workforce during these unprecedented times.