Microsoft has laid off over 15,000 employees this year and is now asking the remaining workers to focus on improving their skills in Artificial Intelligence (AI). Internal messages reveal that the company wants everyone to “invest in your own AI skilling.”
Major Job Cuts in 2025
The tech giant has gone through at least four rounds of layoffs in 2025. The most recent round cut about 9,000 jobs, mostly affecting the Xbox gaming division and sales teams. Earlier in May, around 6,000 employees were let go, and a few hundred more were laid off in June.
AI Now a Key Part of Employee Reviews
Julia Liuson, president of Microsoft’s Developer Division, said in an internal email that using AI is now mandatory for all employees. Managers are being told to consider AI usage when reviewing employee performance. Some teams are even planning to set specific AI goals for staff in the next performance cycle.
Read more: Intel Reveals Layoff Plans and Division Shutdowns to Reshape Future
Big Changes in Sales Team
The company is also shifting how it handles sales. Traditional salespeople are being replaced by more technical “solutions engineers” who can show customers how Microsoft’s AI tools work. Sales head Judson Althoff shared the company’s vision to become “the Frontier AI Firm” and make sure there’s a Copilot AI tool available for every employee and every device.
AI Investments and Strategy Shift
Even though Microsoft is spending nearly $80 billion this year on AI infrastructure, it is cutting costs in other areas. These changes are part of a larger plan to prepare the company for a future led by AI technologies.
Microsoft is downsizing its workforce while going all-in on AI, encouraging remaining staff to get skilled in AI as it becomes central to every role in the company.
