Microsoft is cutting roughly 3% of its global workforce as the company shifts more resources toward the race to develop advanced artificial intelligence, the company confirmed on Tuesday.

Microsoft cuts 7,000 jobs to prioritize AI investments. Layoffs impact LinkedIn, Xbox, and global offices as company streamlines operations.

The move follows a smaller round of performance-based layoffs in January and marks a shift from the aggressive hiring of the pandemic years.

On April 30, Microsoft reported its latest earnings numbers, which highlight one of the best reasons for buying this AI stock: its diversification. While Microsoft is an AI play and that is a big part of its long-term strategy, it doesn't define its business by any means.

Microsoft Research continues to collaborate with the global research community to drive breakthroughs in AI and push boundaries of what’s possible to extend human capability, create value, and deliver broad societal benefit.

In the last few years or so, we have witnessed Microsoft laying off thousands of its employees. Back in 2023, the Redmond giant announced significant job cuts, affecting 10,000 employees. Microsoft then said it was a strategic decision to immunize itself from global changes.

AI is essential to building world-class cybersecurity capabilities for our customers. We are proud that AI is infused across our technology and our product stack,” Ling said. There’s a big event coming up you don’t want to miss that will deeply explore the intersection of AI and cybersecurity: the Potomac Officers Club’s 2025 Cyber Summit.

Although Microsoft did not name Artificial Intelligence (AI) as a cause of the axing, it undoubtedly has had a role to play. Once AI is implemented within operations, IT firms — both services and products — will get flatter.