Amazon and Microsoft reduce staff to flatten teams and refocus strategies after pandemic hiring spree
Microsoft has laid off approximately 6,000 workers—nearly 3 percent of its global workforce—in what it described as “organizational changes necessary to best position the company for success in a dynamic marketplace,” as reported by The Canadian Press.
The cuts began Tuesday and span all levels, teams and geographies, with a significant focus on reducing the number of managers.
According to Microsoft’s notice to Washington state officials, 1,985 of the layoffs are tied to its Redmond headquarters, with about 1,500 in-person and 475 remote roles.
Many of those positions were in software engineering and product management. Affected employees are expected to leave the company by July.
The layoffs come weeks after Microsoft reported stronger-than-expected sales and profits for the January–March quarter.
Amy Hood, Microsoft’s chief financial officer, said during the April earnings call that the company aimed to “build high-performing teams and increase our agility by reducing layers with fewer managers.”
She added that the company’s headcount in March was 2 percent higher than a year earlier, but slightly lower compared to the end of 2023.
The job reductions affect various parts of the business, including LinkedIn and Xbox.
According to The Canadian Press, Microsoft had 228,000 full-time employees as of June 2023, with about 55 percent based in the US.
The company had already announced a smaller round of performance-based layoffs in January.
However, this week’s layoffs are its most substantial since early 2023, when it cut 10,000 roles—or nearly 5 percent of its workforce.
According to Glassdoor lead economist Daniel Zhao, such layoffs are not solely the result of economic stress.
Zhao said, “Big tech companies have trimmed their workforces as they rearrange their strategies and pull back from the more aggressive hiring that they did during the early post-pandemic years.”
He added that management cuts are unlikely to be driven by AI, saying, “You’re not expecting ChatGPT to replace the manager.”
Microsoft vice president Scott Hanselman posted on LinkedIn that it was “the first time [he’d] had to lay people off to support business goals that aren’t [his] own.”
He acknowledged struggling to separate his personal beliefs from the system he participates in and is complicit in, and expressed concern for those affected, calling them “people with dreams and rent.”
He added, “I love them and I want them to be OK.” Hanselman described it as “a day with a lot of tears.”
Microsoft is spending US$80bn in the fiscal year ending in June to develop data centres and infrastructure needed for artificial intelligence, although some projects have been scaled back.
CEO Satya Nadella told Meta CEO Mark Zuckerberg during a recent AI event that “maybe 20, 30 percent of the code” for some Microsoft projects “are probably all written by software.”
Economist Cory Stahle from Indeed told The Canadian Press that the tech sector is still adjusting after aggressive hiring during the COVID-19 pandemic.
“This could be an effort to think more long term,” said Stahle, citing broader economic concerns such as tariffs and cost-of-living increases that may affect consumer spending.
Separately, Amazon confirmed on Wednesday that it is laying off about 100 employees in its devices and services division, which includes Alexa, Echo, Ring, and Zoox, according to CNBC.
Spokesperson Kristy Schmidt said in a statement, “As part of our ongoing work to make our teams and programs operate more efficiently, and to better align with our product roadmap, we’ve made the difficult decision to eliminate a small number of roles.”
Amazon CEO Andy Jassy has led a broader cost-cutting initiative that has resulted in 27,000 job cuts since early 2022.
The devices and services unit previously saw layoffs in 2022 and 2023.
Jassy has pushed to simplify Amazon’s corporate structure by reducing the number of managers and increasing the ratio of individual contributors by at least 15 percent by the end of the first quarter of 2025.
Both Microsoft and Amazon’s latest actions are part of a broader trend among major tech companies continuing to reassess their staffing levels and restructure their operations following the pandemic-era expansion.
