- Microsoft will cut less than 4% of its world workforce across teams role types and geographies.
- Executives are attempting to decrease management layers.
- The software company revealed layoffs in May affecting around 6000 person.
Microsoft has multiple rounds of layoff already this calendar year.
It cut less than 1% of headcount based on performance. The 50 year old software company slashed over 6000 jobs in May and at least 300 more in June.
As June 2024 it employed 228000 people.
Microsoft told Wednesday that it will lay off about 9000 employees.
The move will affect over 4% of its global workforce across different teams levels of experience and geographies a person familiar with matter told media.
The announcement comes on second day of Microsoft 2026 financial year.
Executives at Redmond Washington based company open up reorganization at time of new financial year.
Executives called for 14% year over year revenue growth in June quarter to expected expansion in Azure cloud services and corporate productivity software subscriptions.
Microsoft stock shut at record high of $497.45 per share on June 26. It closed down on 0.2% on Wednesday while the S&P 500 gained 0.5%.
“To position Gaming for enduring success and permit us to focus on strategic growth areas we will end or decrease work in certain areas of business and follow Microsoft lead in removing layers of management to increase agility and effectiveness.Phil Spencer Microsoft CEO of gaming wrote to employee in division.
Microsoft reported almost $36 billion in net income on $70 billion in revenue for March quarter.
Executive called for almost 14% year over year revenue growth in June quarter thanks to expansion Azure cloud services and corporate productivity software subscriptions.
The main point from current round of Microsoft layoffs may well be Xbox is losing its multi year fight to dominate the gaming industry with Game Pass.
To gain more customer to Game Pass Microsoft spent huge money acquiring new Xbox studios beginnign in 2018 Ninja Theory, Compulsion Games Playground Games, Undead Labs in 2019 Double Fine.
It was in October 2017 earning call with investors that Microsoft CEO told world that company sought to replicate Netflix success with same subscription service for gaming.
Game Pass had lauched a few months before.
Xbox division realized that this would not enough to convince dozens of millions of users to subscribe.
Microsoft decided to open its wallet and spend $76.2 billion in consecutive record breaking acquisition of Betheseda parent company ZeniMax Median and Activision Bizzard two of mega publishers in industry
Game PAss growth stagnated below Microsoft huge desire.
Despite the ovrrtures of Xbox executives the subscription service is not permitted on Nintendo or Sony platforms and its progres on Xbox console has reached point of full saturation.
PC Game Pass is progressing but not enough to get where Microsoft desired and cloud gaming has not taken off originally believed.