Microsoft says it is laying off more than 6,000 employees, or around three per cent of its 228,000 full-time workers.
In a statement to media, the tech giant said it was making “organisational changes necessary to best position the company for success in a dynamic marketplace".
While it remains unclear which teams will be most affected or how many jobs will be lost in Australia, Microsoft has more than 3,000 employees across Australia and New Zealand.
The new cuts are the most significant redundancies since Microsoft laid off around 10,000 staff in 2023, when the company cited reduced customer spending and changing economic conditions for the changes.
Microsoft was also reported to have made some performance-based layoffs earlier in 2025, but its global headcount has continued to grow overall in recent years.
In 2024, the company also laid off hundreds of gaming workers following its acquisition of Activision Blizzard, and was reported to have let hundreds of staff go from its Azure cloud business and its mixed reality division, which develops its HoloLens headset.
‘Reducing layers with fewer managers’
Microsoft’s chief financial officer, Amy Hood, suggested the company was reducing some layers of its management structure during a third quarter earnings call on 30 April.
“We continue to focus on building high-performing teams and increasing our agility by reducing layers with fewer managers,” she said at the time.
“At a total company level, headcount at the end of March was two per cent higher than a year ago and was down slightly compared to last quarter.”
Hood said the company expected its capital expenditure to increase in the fourth fiscal quarter of 2025, as it continued to scale-up its artificial intelligence infrastructure.
Microsoft finance executive Bill Duff said during a JP Morgan conference on Tuesday that the company was “saving hundreds of millions of dollars a year” by using AI systems in customer support environments, according to Bloomberg.
The rise of generative AI tools has also influenced recent job cuts or hiring freezes at other tech companies such as Canva, Duolingo, and Salesforce.
Microsoft’s Australian boss heads to Telstra
News of fresh job cuts at Microsoft came just days after the company’s managing director for Australia and New Zealand, Steven Worrall, was confirmed as the next chief executive of Telstra's infrastructure business, Telstra InfraCo.
The organisation’s current CEO, Brendon Riley, is set to retire on 30 September after Worrall begins in the role on 1 September, Telstra told the Australian Stock Exchange (ASX) on Monday.
Microsoft's managing director for Australia and New Zealand, Steven Worrall, is heading to Telstra InfraCo. Image: Microsoft / Supplied
Worrall joined Microsoft in 2014 and stepped into the role of managing director for Australia and New Zealand in 2017, replacing 21-year Microsoft veteran Pip Marlow.
Telstra CEO Vicki Brady said Worrall was a good fit for Telstra, which has been a customer of Microsoft’s Cloud and Azure OpenAI Service.
“Steven’s approach to partnerships, such as Microsoft’s $5 billion Australian investment in cloud computing and AI infrastructure, coupled with his experience leading and growing technology and software businesses are great fits for our ambitions for Telstra InfraCo,” she said in a statement.
