Microsoft is cutting approximately 7,000 jobs, accounting for 3% of its global workforce, as it redirects efforts toward the development of advanced artificial intelligence. CEO Satya Nadella emphasizes necessary organizational changes to position the company for success amidst fierce competition in the AI space. These layoffs follow the company's announcement of beating quarterly revenue expectations, indicating a strategic shift to manage costs associated with its $80 billion investment in AI for fiscal year 2025. This move is part of a broader trend among tech companies facing workforce reductions.
The layoffs will likely impact roughly 7,000 jobs across all divisions and locations of Microsoft's global business, clearly signaling a shift in resources toward advanced AI development.
'We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,' a Microsoft spokesperson stated, indicating an ongoing structural transformation.
D.A. Davidson analyst Gil Luria noted that Microsoft may need to reduce headcount by at least 10,000 annually to offset growing costs related to AI investment.
Microsoft announced the layoffs shortly after reporting a quarterly revenue of $70.07 billion, which exceeded Wall Street's expectations and showcases the financial strategy behind these cuts.
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