Microsoft has cut 4,800 jobs; HR Head Amy Coleman Told Employees that the Business is Changing

HR Head Amy Coleman Told Employees: Microsoft has laid off approximately 4,800 employees, representing about 2.1% of its total workforce. The company began its new fiscal year on Monday. These layoffs primarily affected Microsoft’s commercial sales business and the Xbox gaming division. The move comes at a time when the company’s stock has experienced its worst month since the dot-com crash.

Chief People Officer Amy Coleman shared this information in a memo to staff. She described the layoffs not merely as a cost-cutting measure, but as part of a broader shift in how Microsoft operates. She wrote, “Today, we are eliminating approximately 4,800 positions, which is about 2.1% of our total workforce. We are focusing our people, investments, and energy on priorities that will strengthen Microsoft’s position for customers in a rapidly changing industry.”

This is not unusual for Microsoft; the company typically implements job cuts around July 1st, at the start of its fiscal year. Last year’s reductions were significantly larger: 6,000 roles were eliminated in May, followed by another 9,000 in July, totalling about 4% of the workforce. Microsoft employed over 220,000 people before these recent cuts.

The timing coincides with growing investor anxiety. Microsoft’s stock fell 19% in June alone, its steepest monthly decline since the dot-com era. Markets are apprehensive about whether the massive spending on AI will actually yield tangible benefits.

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Amy Coleman Drew a Clear Distinction Between AI and the Job Cuts

However, Amy Coleman drew a clear distinction between AI and the job cuts. “I also want to be clear that AI is not replacing the roles being eliminated today,” she stated, while acknowledging that AI is transforming the way work is done across the company. Earlier this year, Microsoft attempted to mitigate the impact in the US through a voluntary retirement scheme for employees at Level 67 and below whose combined age and years of service totalled 70 or more.

Approximately one-third of the nearly 9,000 eligible employees opted for the buyout, aligning with the company’s expectations. Consequently, Microsoft had to make fewer workforce reductions compared to the previous year.

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