Microsoft AI Restructuring Cuts Thousands of Jobs as AI Spending Tops $100 Billion

Microsoft is preparing to cut thousands of jobs next week across Xbox, sales, and consulting divisions, as the company's annual spending on AI and cloud infrastructure surpasses $100 billion. The Microsoft AI restructuring will affect less than 2.5 percent of the global workforce of roughly 220,000 people, according to a report confirmed by GeekWire.

The job reductions follow Microsoft's pattern of reorganizing around the close of its fiscal year on June 30. Last year the company laid off more than 15,000 people. This year's cuts are smaller in part because Microsoft introduced its first voluntary retirement program. About 2,900 of the 8,750 eligible US employees accepted the buyout, reducing the number needed through involuntary layoffs.

Microsoft's capital expenditure on AI and cloud infrastructure reached more than $100 billion in the just-completed fiscal year, up from $88.7 billion the prior year. Roughly two-thirds of that spending goes to the chips that power AI workloads. The Microsoft AI restructuring reflects how the company is rebalancing its workforce as AI investments reshape priorities across divisions.

Microsoft shares closed at $373.02, down 19 percent over the past month and near a 52-week low. The Microsoft AI restructuring comes at a time of growing investor unease about whether the massive AI spending will generate sufficient returns, a question that follows the broader tech industry as capital outflows for AI infrastructure accelerate.

Photo by mojol NEWS on Unsplash

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