In its third wave of job cuts this year, Microsoft is expected to lay off more than 1,000 employees, with the majority of the impact falling on its sales and marketing divisions. This restructuring move reflects the company’s continued pivot toward artificial intelligence (AI) and strategic realignment of business priorities.
This latest round follows previous layoffs that affected software and product teams. In May 2025, Microsoft let go of approximately 6,000 employees, followed by another round impacting 300 more. Now, the sales and marketing teams are reportedly bearing the brunt, as Microsoft begins outsourcing software sales to third-party vendors, particularly for smaller clients.
While the exact number of affected employees has not been officially disclosed, reports suggest that further restructuring could be on the horizon. The broader transformation is being driven by Microsoft’s increased investment in AI—reportedly setting aside a massive $80 billion to build advanced AI data centers.
Following the initial layoffs earlier this year, CEO Satya Nadella had addressed employees internally, emphasizing that the job cuts were not reflective of poor performance or individual shortcomings. Instead, he highlighted a broader repositioning to align with Microsoft’s evolving business goals, particularly around embedding AI more deeply across its products and services.
The company’s renewed focus on AI has been long in the making, but recent developments have accelerated its execution. As Microsoft continues to shift gears in the age of AI, workforce restructuring appears to be part of its larger strategy to stay competitive and future-ready.
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