Tech Giant’s Second Major Layoff in 2025
Microsoft job cuts are set to impact around nine thousand roles, as part of the tech behemoth’s latest global restructuring. The company confirmed on Wednesday that it would eliminate 9,000 jobs worldwide, nearly 4 per cent of its total workforce of 228,000, making this its second significant round of redundancies this year.
The Australian Financial Review reported that nearly 120 Australian roles are likely to be affected. While Microsoft has not yet confirmed the exact number or departments impacted locally, sources suggest that middle management, sales, and other commercial roles could face the axe.
Figure 1: Microsoft Slashed 9,000 Jobs Across the World.
A Shift Towards AI Efficiency
A Microsoft spokesperson told multiple media outlets, “We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace.”
This wave of Microsoft job cuts aligns with a global pivot towards artificial intelligence. Microsoft, one of the biggest investors in OpenAI, is aggressively pushing AI adoption across its platforms, including its flagship product Copilot, a conversational, AI-powered assistant embedded across Microsoft software.
The company insists that job cuts are not just about cost-saving, but about streamlining operations to ensure efficiency and staying ahead in a rapidly transforming industry.
Previous Cuts Set the Tone
This isn’t the first time Australian workers have felt the sting of tech sector downsizing. In May, Microsoft cut 6,000 jobs globally, which included product and engineering staff, with up to 100 Australian workers impacted. The latest cutback continues this trend, with Bloomberg reporting a focus on reducing layers of middle management and removing duplication between teams.
CNBC reported that the layoffs would impact workers across different geographies and levels of experience, not just entry-level roles.
AI Expansion and Changing Job Dynamics
Microsoft’s strategic focus on AI is driving much of its internal reorganisation. The company plans to invest over $80 billion in developing new data centres, training large language models, and creating AI chips. Its goal is to transform its workforce to better support its growing customer and partner ecosystem in the AI age.
“We are evolving the commercial solution areas within our sales organisation to better reflect the era of AI and support the growth of our customers and partners,” the company said in a statement earlier this year.
Microsoft is also moving more tasks to third-party providers. In April, it announced it was exploring outsourcing certain software sales functions, which raised concerns about further redundancies in customer-facing roles.
Figure 2: Microsoft is cutting jobs as it shifts focus to AI, investing $80 billion in data centres, AI chips, and model training to reshape its workforce and better serve customers and partners.
Broader Industry Trends
Microsoft isn’t alone. Other tech giants such as Amazon, Meta, and Telstra have announced similar transitions in recent months.
Amazon CEO Andy Jassy noted, “As we roll out more generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”
Meta has also begun trimming its workforce to make space for high-end AI talent, offering massive bonuses to engineers and researchers. Earlier this year, Meta announced it would cut 5 per cent of its global staff, targeting lower performers.
Telstra, one of Australia’s largest telecommunications firms, echoed similar sentiments. CEO Vicki Brady said, “Our workforce will look different in 2030 as we develop new capabilities, find new ways to leverage technology, including AI, and we have to stay focused on becoming more efficient.”
Microsoft’s AI Gamble
Microsoft’s deep involvement in AI spans far beyond workplace tools. The company remains a major stakeholder in OpenAI, and its products, like Azure AI and Copilot, are expected to shape the future of productivity software.
However, not all has gone smoothly. Reports suggest that Microsoft has struggled to sell Copilot to some business customers, who prefer using OpenAI’s ChatGPT. Tensions have reportedly emerged between Microsoft and OpenAI over commercial strategies and product direction.
Still, Microsoft executives remain committed. They believe artificial intelligence will define the next 50 years of technology and business. To that end, the company hired British AI expert Mustafa Suleyman to head its newly formed Microsoft AI division earlier this year.
What This Means for Australian Workers
While Microsoft’s job cuts in Australia may be relatively small in number compared to global totals, the announcement has amplified concerns about job security in a rapidly evolving tech landscape.
Workers in tech, sales, and support roles may need to reskill or shift their focus towards AI-related disciplines. As tech companies increasingly automate traditional roles, opportunities may open in AI governance, cybersecurity, prompt engineering, and AI system integration.
The shift also underscores the importance of continuous learning in the tech industry. Professionals are encouraged to embrace upskilling, particularly in fields like machine learning, data analytics, and cloud infrastructure.
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A Tough Year for Tech Employees
Microsoft’s second major round of layoffs in 2025 caps off a difficult year for tech workers globally. Redundancies have swept across firms that once symbolised stability and innovation. While AI promises transformative potential, it also challenges the traditional notion of job permanence.
The message from tech leaders is clear: the workforce must evolve. Whether Australian employees impacted by the Microsoft job cuts can pivot and reskill fast enough will be a defining question in the next chapter of the local tech industry.
