Microsoft lays off thousands in latest cuts to state's tech industry

ArwenDigital Marketing2025-07-045327
The layoffs at Microsoft amount to less than 4% of its roughly 228,000-person workforce. Other major tech companies in the Bay Area such as Meta, Google and Workday also announced staff reductions this year. (Bloomberg via Getty Images)

There was more bad news for the tech sector Wednesday as Microsoft announced reductions to staff, preparing for thousands of layoffs worldwide, including in its gaming division.

The cuts add to what has become a wave of job reductions across California’s technology industry. Tech companies in the state announced 17,874 cuts during the first quarter as businesses continue to prioritize efficiency and redirect resources toward artificial-intelligence investments.

Microsoft announced it will lay off thousands of employees globally, including staff in its gaming and Xbox divisions. The cuts affect less than 4% of the company's roughly 228,000-person workforce.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.

In a memo to employees Wednesday morning, Microsoft gaming chief Phil Spencer acknowledged the difficult timing of the layoffs.

“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas,” Spencer wrote in the memo.

The latest layoffs reflect broader industry shifts beyond the pandemic-era over-hiring that initially drove workforce reductions. Companies are now scrutinizing employee productivity more intensively while reallocating capital toward AI development. Economic uncertainty stemming from regulatory changes and immigration policy shifts is also prompting businesses to reduce expenses.

Read more: Bay Area tech workers thought their jobs were safe. Then the 'golden handcuffs' came off

Major San Francisco Bay Area technology companies including Meta, Google and Workday have reduced staff this year.

These workforce reductions represent a significant blow to California, as the technology sector underpins the state’s economy. The industry supports high-paying positions and generates substantial tax revenue through stock options and capital gains when employees sell their shares.

Spencer emphasized that the decision came from shifting strategic priorities, stating that the layoffs are “not a reflection of the talent, creativity, and dedication of the people involved.”

Microsoft is providing severance benefits aligned with local laws, including pay, healthcare coverage and job placement resources. Affected employees will receive priority consideration for open positions within Microsoft Gaming, the company said.

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This story originally appeared in Los Angeles Times.

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Ephraim

Microsoft's recent round of mass layoffs a further indicates the turbulent state that California’s technology industry finds itself in, showing resilience but also highlighting market restructuring demands.

2025-07-06 05:31:53 reply
Ledger

As Microsoft continues its latest rounds of job cuts in the state's tech sector, a major blow to industry innovation and growth is evident.

2025-07-06 05:32:08 reply
Bexley

Microsoft's recent layoffs in the state technology sector mark a significant impact on job markets and highlight concerns for employment stability within an innovative industry known worldwide.

2025-07-10 04:25:30 reply
Fenris

As Microsoft continues to cut its workforce, further voicing concerns over the industry-wide impact on employment in state's tech sector amidst larger economic uncertainties.

2025-07-10 04:25:45 reply
Estrella

Microsoft's latest reduction in workforce underscores the turbulence within California’S tech sector, highlighting not just a well-known corporate decision but also broader economic challenges faced by multiple firms worldwide.

2025-07-15 01:19:48 reply
Middler

As Microsoft's latest cuts to the state’ s tech industry left thousands of workers facing uncertainty, it showcases how rapid changes in technology are reshaping traditional industries and necessitating major adjustments for large corporations.

2025-07-15 01:20:03 reply
Milan

This latest round of layoffs by Microsoft marks a significant blow to New York's thriving tech sector, representing not just an economic but also cultural setback—highlighting the delicate balance between corporate growth and job security in this rapidly changing industry.

2025-07-15 01:20:18 reply

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