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Microsoft has cut some 15,000 staff in 2025 alone as part of a large-scale strategy realignment that's putting artificial intelligence at the core of the future direction of the company. As per a comprehensive report from The Verge, the job reduction is specifically attributable to Microsoft's bold investments in AI infrastructure.

The Redmond-based tech giant, like several others in the industry, appears to be at a crossroads: maintain existing workforce levels or double down on the next generation of AI-driven innovation. The Verge’s Tom Warren reports that Microsoft’s leadership had to choose between reducing its AI investment or making deep operational cuts—and it’s clear which path was taken.

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Thousands of Jobs Lost Across Departments

These cuts have not been confined to a specific section of the company. Workers in sales, marketing, product management, and even technology roles have been affected. In other instances, employees have been transferred, but numerous others have been laid off completely.

Even Microsoft's Xbox gaming division hasn't been exempted. The company has closed a number of studios, cancelled unannounced games, and fired team members in the restructuring.

This trend is not particular to Microsoft. Intel, for example, has said it will cut 24,000 jobs by the end of 2025, citing the same reason: the quest for AI superiority.

A Bigger AI Vision Behind the Cuts

At the heart of Microsoft’s transformation is a massive investment into tools like MUSE, the company’s generative AI platform capable of real-time gameplay creation without code or development tools. While that sounds like the future of game development, it has come at a cost—human talent.

According to The Verge, even sales teams—the very force driving Microsoft’s new tech to market—haven’t been spared. The layoffs have also affected business experts, technical specialists, and product managers.

What’s striking is that these reductions come during a period of record financial performance. Microsoft has reported nearly $75 billion in net income over the last three quarters and is planning to invest $80 billion into AI infrastructure alone.

Satya Nadella Addresses Employee Concerns

Amid growing unease internally, Microsoft CEO Satya Nadella addressed the job cuts in a memo to employees. “Before anything else, I want to speak to what’s been weighing heavily on me and what I know many of you are thinking about: the recent job eliminations,” he wrote.

Nadella explained the layoffs as a necessary step in Microsoft’s transformation into an AI-first company. He emphasised that the shift would require both “learning and unlearning” and expressed gratitude to departing employees for their contributions.

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As Microsoft makes this high-stakes bet on AI, the cost is already evident—not just in dollars, but in people. With competitors like Sony, EA, and Intel taking similar steps, it’s clear that the next frontier of tech isn’t just about smarter machines but the tough choices companies are making to get there.