Microsoft Layoffs: Company Plans Workforce Reduction in 2025, Targets Low-Performing Employees

Microsoft plans to reduce its workforce in 2025, targeting employees who fail to meet performance expectations across various divisions, including its security unit. This move is part of the company's broader strategy to enhance its performance management approach, mirroring similar initiatives undertaken by other major tech companies.

The job cuts, affecting under 1% of Microsoft’s 228,000 employees, are part of a broader initiative to improve performance management. The layoffs also impact the security division. Sources reveal that managers have spent months assessing staff performance at all levels, including senior positions.

According to a report of India Today, At Microsoft, we focus on high-performance talent. We’re always working on helping people learn and grow. When people are not performing, we take appropriate action, the spokesperson said as mentioned in the report.

Microsoft’s upcoming layoffs, aimed at addressing underperformance, are not expected to significantly reduce its total workforce, as the company often refills positions. As of June 2024, Microsoft employed around 228,000 people. Managers have spent months evaluating staff performance across all levels, including senior roles, with the security division also impacted. This follows previous rounds of job cuts, including 10,000 layoffs in 2023, about 5% of its workforce, and additional cuts in the Xbox division.

In 2024, Microsoft laid off nearly 2,000 employees in its gaming division after acquiring Activision Blizzard. Later in the year, the company aimed to cut 1,500 roles in its Azure cloud computing business, but the final number of job losses was approximately 1,000.