Vole claims the layoffs target underperforming employees, including roles in its security division.A Microsoft spokesVole confirmed the layoffs but did not specify the number of affected staff members, stating, "At Microsoft, we focus on high-performance talent."

They added, "We are always working on helping people learn and grow. When people are not performing, we take the appropriate action." The layoffs will reportedly impact less than a  per cent of Microsoft's 228,000 employees, a figure last updated in June.

Microsoft has made large-scale layoffs a recurring pattern over the past several years. In 2023, the company cut more than 10,000 jobs, followed by additional layoffs in 2024 despite record earnings. Similar to the cuts made in 2022, which also reduced around a per cent of its headcount, Microsoft clarified that these layoffs are about pruning the payroll rather than making organisational changes.

In light of these cuts, it is suggested that there might be an AI link to the reductions, as Microsoft has been aggressively pushing to adopt more AI technologies.

Unidentified sources told Business Insider that Microsoft would likely backfill the positions cut this month, meaning there would not be much of a reduction in overall headcount. Microsoft confirmed this to be the case.

The company wrapped up a strong fiscal 2024 in June, posting consecutive quarters of rising earnings. Microsoft reported $22 billion in net income for the fourth quarter of FY24, which increased to $24.7 billion in the first quarter of FY25, ending in October.

Despite the recent job cuts, Microsoft remains focused on its AI initiatives, committing $80 billion for AI spending in 2025, and continues to push forward in the tech industry.