The tech giant intends to reduce organizational layers by having fewer managers and streamlining its products, procedures and roles, Microsoft said Wednesday.

Microsoft is planning to lay off 9,000 employees, impacting less than 4% of its global workforce, according to a report by CNBC. Microsoft continues to beat expectations in its quarterly earnings; in its most recent report, the company grew its net income by 18% year over year, amounting to a total of $25.8 billion.

Microsoft is laying off thousands of employees, its third round of cuts in recent months, the company confirmed on Wednesday.

The staggering costs of its AI investments threaten the tech giant's margins, prompting cost-cutting measures.

These changes come at a time when we have more players, games, and gaming hours than ever before,” said Xbox head Phil Spencer in an email to staff.

Microsoft says it is laying off about 9,000 workers, its second mass layoff in months and its largest in more than two years.

Microsoft is making job cuts affecting less than 4% of its total workforce as it focuses on reducing layers with fewer managers.

While some other European gaming offices are also cutting, US units are reportedly being informed later Wednesday. Phil Spencer, CEO of Microsoft Gaming, sent an email to all Microsoft Gaming employees regarding the layoffs,

Microsoft announced thousands of layoffs worldwide, including its gaming division, as the tech industry continues workforce reductions in 2025.

Software giant Microsoft on Wednesday said that, once again, thousands in its global workforce will be laid off across multiple levels as the company strives for a slimmer operation.