Firm handshake goes limp: Microsoft to cut thousands of sales jobs amid $80B AI spending

Microsoft is planning to cut thousands of jobs, primarily targeting sales roles, as the tech giant restructures its workforce while dramatically increasing AI investments, Bloomberg News reported Wednesday. The layoffs represent the latest cost-cutting measure as Microsoft allocates $80 billion in capital expenditure this fiscal year, mostly for expanding data centers to support AI services.

What you should know: The job cuts follow Microsoft’s previous round of layoffs in May, which affected approximately 6,000 employees.

• The layoffs are expected to be announced early next month, following the end of Microsoft’s fiscal year.
• While sales teams will be the primary focus, the cuts will not exclusively affect sales roles, and timing could still change.
• Microsoft employed 228,000 workers as of June last year.

The big picture: Microsoft’s workforce reduction comes as major tech companies balance AI investment costs with operational efficiency.

• The company has ramped up AI investments to solidify its leadership position as businesses across industries accelerate AI integration into their products and services.
• Amazon CEO Andy Jassy said Tuesday that the rollout of generative AI and automated agents will reduce Amazon’s total corporate workforce in the coming years.

Why this matters: Microsoft’s $80 billion capital expenditure commitment underscores the massive infrastructure requirements for AI services, forcing companies to make difficult trade-offs between human resources and technological capabilities.

• Most of the spending targets data center expansion to address capacity bottlenecks for AI services.
• The move reflects broader industry trends where companies are restructuring traditional roles while investing heavily in AI infrastructure.

What’s next: Microsoft has not responded to Reuters’ request for comment, leaving specific details about affected departments and severance packages undisclosed.