Microsoft trims jobs as new year begins

Redmond claims tiny cuts are performance based

Microsoft kicks off the new year with more job cuts, albeit fewer than one percent of employees reportedly face the ax.

As first reported by Business Insider, Microsoft is trimming its workforce again, including roles in its security division, with the cuts targeting underperforming employees. A Microsoft spinner confirmed the layoffs with BI but declined to specify how many staffers are affected, stating: "At Microsoft, we focus on high-performance talent."

"We are always working on helping people learn and grow. When people are not performing, we take the appropriate action," the spokesperson told The Register. 

The layoffs will reportedly affect less than one percent of the Windows maker's 228,000 employees, a total last updated in June.

The tech giant has made large-scale layoffs a pattern in the past several years, with more than 10,000 jobs cut in 2023, and additional layoffs in 2024 despite record earnings. As was the case in 2022, when it eliminated around a percent of its headcount, Microsoft noted that last year's job cuts and this latest round are all about pruning the payroll bush rather than making organizational changes.

A one percent cut, though it sucks for those losing their employment, is normally not worth mentioning, but we'll do so today so that if anyone hears word of the layoffs, they'll now know the full extent and context.

As we pondered last year after Microsoft's post-record-earnings layoffs in April 2024, there could be an AI link to the cuts, as Redmond has been aggressive in its push to adopt more and more AI. Unidentified sources who spoke to BI claimed Microsoft would likely backfill the jobs cut this month, meaning there wouldn't be much of a reduction in overall headcount. Microsoft confirmed this to be the case.

The Azure titan wrapped up a strong fiscal 2024 in June, posting consecutive quarters of rising earnings.

Microsoft reported $22 billion in net income for the fourth quarter of FY24 and saw that figure rise to $24.7 billion in the first quarter of FY25, which ended in October.

"AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process," Microsoft CEO Satya Nadella said in October. ®