Edited by | Zheng Liyuan
Produced by | CSDN (ID: CSDNnews)
"Strong financial performance, but brutal layoffs." This might be the latest assessment many Microsoft employees have of the company.
Late last month, Microsoft just announced the good news of exceeding $70 billion in revenue for the third quarter of fiscal year 2025 and soaring AI and cloud businesses. This week, however, bad news arrived: Microsoft announced layoffs of approximately 6,000 people, accounting for 3% of its global workforce.
Among those laid off were a TypeScript veteran who had worked at the company for 18 years and a director who was just pushing forward the AI strategy; some were on sick leave, while others had received the "Gold Club Employee of the Year" award... "We were told to stop working immediately and set an 'Out of Office' automatic reply," someone wrote on social media.
On one hand, revenue is soaring and AI investment is surging, but on the other hand, it's "thank you for your participation, please leave immediately" - why is Microsoft doing this?
Outwardly Strong: Microsoft's Financial Results "Crush Expectations" Again
On April 30, Microsoft announced its financial results for the third quarter of fiscal year 2025, delivering an almost flawless report card:
Total Revenue: $70.1 billion, a 15% year-over-year increase; Operating Income: $32.0 billion, a 19% year-over-year increase; Net Income: $25.8 billion, an 18% year-over-year increase; Cloud Business (Microsoft Cloud) Revenue: $42.4 billion, a 20% year-over-year increase; Search and advertising revenue grew by as much as 21%; Key product lines such as Microsoft 365, Dynamics 365, LinkedIn, and Azure also saw overall growth...
In other words, Microsoft is not losing money; on the contrary, it's making significant profits. Announcing layoffs immediately after such a "financial report feast" is inevitably puzzling.
Resource Restructuring to "Make Way for AI"?
Microsoft's explanation for this is that the layoffs are not due to a financial crisis or poor employee performance, but are "necessary organizational adjustments to better position the company in a rapidly changing market environment."
Sources reveal that the core driver behind the layoffs is not that AI itself has "replaced" human jobs, but rather to "optimize resource allocation and invest more capital in AI-related businesses." It is reported that Microsoft will invest up to $80 billion in AI infrastructure and R&D in fiscal year 2025, the largest capital expenditure in several years.
As Microsoft CEO Satya Nadella said in an earnings call in January this year: "When technology platforms change, we need to rethink incentive structures and market strategies. We cannot continue with the mindset of the previous generation. We must learn to embrace new architectural designs and market opportunities."
Unlike many companies, Microsoft's approach to betting on AI is not simply hiring more AI talent, but making full-stack investments in data centers, chips, system software, model training, application integration, etc. This means that even with high revenue, to maintain profit margins, they must "cut" positions or teams that do not currently contribute directly to the AI strategy.
On this point, Wedbush analyst Gil Luria also pointed out that Microsoft's layoffs are a "natural consequence" of its large-scale capital investment: "If Microsoft continues to push forward with AI construction at its current level of capital expenditure each year, it must reduce at least 10,000 positions to balance depreciation and operating expenses."
In other words, Microsoft's large-scale layoffs this time are an organizational streamlining "to make space for AI."
Who Was Laid Off?
It is reported that the layoffs affected multiple departments and business lines globally, including LinkedIn, Xbox, Azure, engineering R&D, etc., including many long-term Microsoft employees and key members of AI teams.
A senior engineer who was laid off wrote on X (formerly Twitter):
"I worked at Microsoft for 18 years, about 10 of them on TypeScript. Sadly, I was laid off in the latest round. I need a few days to process this, then I'll start looking for a job. Thank you to everyone who has been part of my journey so far."
Surprisingly, Microsoft's AI Director Gabriela de Queiroz also announced on X that she had been laid off: "Sharing some bittersweet news: I've been impacted by Microsoft's latest round of layoffs."
"No matter how hard you work, how much promotion you do for the company, how many results and visibility you bring; whether you helped Microsoft become a well-known name in AI enterprises, or pushed various initiatives to make Microsoft a better workplace for people - none of this will save you from being laid off."
Gabriela de Queiroz added that she was very sad about this because many excellent talents she had worked with were laid off: "We were asked to stop working immediately and set an 'Out of Office' automatic reply. I chose to stay for a while longer, finish some work handovers, and say goodbye to some colleagues, which is what I feel I should do."
As for her next steps, Gabriela de Queiroz currently has no direction but remains optimistic:
In addition, some Microsoft employees reported being laid off while on medical leave. Not only was she herself laid off, but her husband who also worked at Microsoft was affected by this wave of layoffs – this has sparked external questions about Microsoft's layoff strategy: has the commitment to "making way for AI" become so cold that it ignores humanistic care?
AI Has Not Replaced Humans, But AI Strategy Might
Ironically, many people were originally working in Microsoft's AI department or providing support for AI platform development, but ultimately became "sacrifices" of the AI strategy.
Satya Nadella previously admitted in a public speech in Silicon Valley: "In some Microsoft projects, 20%-30% of the code is automatically generated by AI." In other words, although these layoffs are not because "AI replaced humans," the shift in strategic focus driven by AI has indeed changed Microsoft's employment logic. Specifically, Microsoft is now more inclined to retain talent that can build models and deploy infrastructure rather than traditional project management or peripheral support roles.
Has the Market Bought In? The Answer Seems to Be Yes
Although the news of Microsoft's layoffs caused significant reaction in public opinion, the capital market seems to have given positive feedback.
On the day the layoff announcement was released, Microsoft's stock price closed at $449.26, hitting a new high for the year; its market value once exceeded $3.33 trillion, again leading Apple ($3.18 trillion); investors generally believe that cost-cutting + increased AI investment = higher future profit margins.
In other words, the two keywords "cost reduction and efficiency increase" and "AI transformation" perfectly hit Wall Street's expectations.
In fact, over the past few years, large tech companies including Amazon, Google, and Meta have almost all been affected by the layoff wave. And Microsoft, a tech giant once known for its "stability" and "high salaries," has also had to make choices in this wave of the AI revolution.
Certainly, AI is currently the hot trend, but what the trend brings is not necessarily all opportunities; it might also be intense pain. Whether this "reshaping" of human resources can bring the "strategic dividends" of the AI era is something we do not yet know – but from the current situation, one thing is certain: even if AI doesn't replace us, we must re-prove our unique value.
Reference Links:
https://www.cnbc.com/2025/05/13/microsoft-is-cutting-3percent-of-workers-across-the-software-company.html
https://www.goodreturns.in/news/microsoft-layoffs-2025-6000-people-lose-jobs-why-worlds-largest-tech-company-is-firing-its-employees-1429045.html
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