Microsoft has reportedly laid off over 1,500 employees in its cloud sector as part of a reorganization effort, according to sources familiar with the situation. The layoffs primarily affected workers in the Azure for Operators and Mission Engineering divisions, with hundreds more expected to be let go in the future.
The tech giant stated that these organizational adjustments are necessary for managing the business efficiently and that they will continue to invest in strategic growth areas to support customers and partners. However, Microsoft did not confirm the total number of affected employees.
The layoffs come as Microsoft’s Azure cloud business continues to experience significant growth, fueled in part by a partnership with OpenAI. The company recently extended its collaboration with OpenAI, investing billions of dollars in the ongoing partnership.
In addition to the recent layoffs in the cloud sector, Microsoft had previously cut around 10,000 jobs in January 2023, with another 1,900 employees let go in the Activision Blizzard and Xbox divisions. Despite the layoffs, Microsoft reported a 17% year-over-year revenue increase in its Q3 fiscal 2024 earnings report, reaching $61.9 billion.
Similarly, Alphabet, Google’s parent company, has also laid off hundreds of employees in its cloud division, citing internal documents. Google stated that the reorganization is to meet customers’ priorities and ensure long-term success. The layoffs include recent hires and employees who had not completed their onboarding process.
Overall, the tech sector appears to be going through a period of reorganization as companies like Microsoft and Google make strategic adjustments to align resources with their primary product priorities. These changes aim to enhance efficiency and drive better business outcomes as the industry evolves.
