Microsoft Corporation (MSFT) Stock: Company Plans Major Job Cuts While Stock Hits Record High

TLDR

Table of Contents

Microsoft plans to cut thousands of jobs in sales and other departments starting in July, following 6,000 layoffs in May
The company is investing $80 billion this fiscal year in AI data centers, creating pressure to reduce labor costs elsewhere
Microsoft stock hit a fresh high at $480.24, up 14% year-to-date, making it one of the best-performing Magnificent Seven stocks
Other tech giants like Amazon, Google, and CrowdStrike are also cutting jobs while citing AI as a reason for workforce reductions
Entry-level tech hiring dropped 14% in 2024 compared to 2023, with new graduate hiring down over 50% since 2019

Microsoft stock reached a new peak of $480.24 this week. The milestone comes as the tech giant prepares for another round of layoffs.

The company plans to eliminate thousands of positions starting in July. Sales departments and other teams will face the biggest cuts, according to reports.

This marks the second major reduction this year. Microsoft already cut around 6,000 jobs in May across product and software roles.

Microsoft is planning to cut thousands of jobs, particularly in sales, as part of the company’s latest move to trim its workforce amid heavy spending on AI https://t.co/X22dH3m3JT
— Bloomberg (@business) June 18, 2025

The timing reflects a common pattern in tech. Companies are boosting AI spending while trimming workforce costs to maintain profit margins.

Microsoft is pouring $80 billion into AI infrastructure this fiscal year. The massive investment covers data centers that train AI models and run applications.

President Brad Smith acknowledged the trade-off in January. He wrote that AI “will disrupt the economy and displace some jobs” in a blog post about investment plans.

The company employed approximately 228,000 people worldwide at the end of last fiscal year. About 120,000 of those positions were in the United States.

AI Spending Drives Workforce Changes

Other tech companies are following similar playbooks. Amazon CEO Andrew Jassy told employees that AI would create a “smaller corporate workforce” in coming years.

CrowdStrike and Duolingo executives have also pointed to AI when explaining job cuts. The language-learning app reduced contractor usage while the cybersecurity firm trimmed staff.

Buy-now-pay-later company Klarna made headlines last year. The firm claimed AI was handling work previously done by 700 customer service agents.

However, Klarna’s CEO later admitted overdependence on AI hurt service quality. The company now ensures customers can always speak with humans when needed.

Market Performance Remains Strong

Microsoft stock has gained 14% year-to-date. The performance makes it one of the best Magnificent Seven performers in 2025, trailing only Meta.

D.A. Davidson analyst Gil Luria offered a stark calculation. He estimated Microsoft might need to eliminate 10,000 positions annually while maintaining current AI investment levels.

Entry-level hiring across big tech dropped 14% in 2024 compared to 2023. New graduate hiring has fallen over 50% since 2019, according to venture capital firm SignalFire.

The trend suggests companies are replacing departing workers with AI rather than new hires. This approach avoids the headlines that come with mass layoffs.

Google parent Alphabet recently expanded buyout offers to U.S. employees. The move followed earlier voluntary departure programs across the company.

The pattern extends beyond individual companies. Tech firms are collectively reshaping their workforce strategies around AI capabilities.

Microsoft’s stock performance suggests investors approve of the cost-cutting approach. The shares have outperformed many peers despite ongoing workforce reductions.

The latest job cuts are expected to be announced in early July. The exact number of positions affected remains under discussion within the company.

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