Microsoft has announced plans to lay off around 9,000 employees, which is less than 4% of its global workforce.

The layoffs will affect various teams, locations, and roles within the company.

The announcement comes as Microsoft begins its 2026 fiscal year, a time when the company usually makes organizational changes.

A Microsoft spokesperson indicated that these adjustments are intended to enhance the company’s position in a changing marketplace. This decision is part of a trend of layoffs by the company.

Earlier this year, Microsoft cut over 6,000 jobs in May and at least 300 in June.

The company aims to reduce management layers to increase agility. This strategy was mentioned by Phil Spencer, CEO of Microsoft’s gaming division, in a memo to employees in that department.

Despite these layoffs, Microsoft remains one of the most profitable companies in the world. The company reported US$26 billion in net income on US$70 billion in revenue for the March quarter.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ “Unbossing” trend reshapes tech management structures

Microsoft’s latest layoffs reflect a broader industry trend of “flattening” organizational structures by reducing management layers to improve efficiency.

Multiple tech giants are purposefully increasing their “span of control,” the number of employees reporting to each manager, to streamline decision-making and reduce bureaucracy 1.

This approach has gained momentum since 2022-2023, with a Korn Ferry report finding 44% of U.S. companies reduced managerial levels in the past year 2.

The strategy aims to empower individual contributors and speed up decision-making, but data shows potential drawbacks. Manager engagement declined from 30% to 27% in 2024, and 35% of employees report feeling directionless without sufficient managerial guidance 3.

Companies must balance efficiency gains against leadership gaps, as Gallup research shows 70% of team engagement is directly linked to managers, highlighting their critical role in organizational performance 3.

2️⃣ Microsoft’s layoff history reveals cyclical workforce adjustments