Microsoft Corporation (MSFT.US) is considering another round of layoffs! "AI is changing everything" is sweeping through business operations, as budget for computing power infrastructure accelerates to replace manpower.

Some media reports citing informed sources revealed that the US technology giant Microsoft Corporation (MSFT.US) is preparing to implement a new round of layoffs, which could potentially affect thousands of employees. The media reports stated that this tech giant is seeking to reduce less than 2.5% of its global workforce positions. According to a team file submitted to the US Securities and Exchange Commission (SEC) as of June 30, 2025, the company had approximately 228,000 full-time employees at that time. The layoff plan of Microsoft Corporation this time was disclosed by the media in the context of the macro background of the ongoing revolution in enterprise operating efficiency driven by the logic of "AI disrupting everything" to reduce costs and increase efficiency, as well as the significant increase in infrastructure investment in AI computing power by technology giants such as Oracle Corporation, Alphabet Inc. Class C to advance a more robust revenue path for AI computing power resources. It highlights that these technology giants are striving to free up larger cash reserves to build AI computing infrastructure and embrace the narrative of cost reduction and efficiency improvement under the theme of "AI disrupting everything". More accurately, Microsoft Corporation is restructuring some important organizational structures from traditional software sales, IT consulting and IT outsourcing business delivery, game consumer business, etc., which have been redundant and complex for a long time, compressing them into closely serving the global AI inference cloud computing infrastructure and Copilot AI applications penetration acceleration. The process of constructing AI data centers globally and operating efficient machines related to AI applications. Statistics from early June showed that the US tech industry announced the largest layoff plan in nearly two years in May. Combining this with the recent news that Oracle Corporation announced a layoff of 21,000 people in the past 12 months, it indicates that these technology companies focusing on cutting-edge technology trends are continuously increasing the massive expenditures/budgets associated with AI computing power infrastructure while also highlighting that the wave of AI intelligent agents (i.e. AI Agent) ignited by Anthropic may come at the cost of mass layoffs to achieve cost reduction and improved labor productivity records. Global technology companies including Oracle Corporation, Microsoft Corporation, Amazon.com, Inc., and Alphabet Inc. Class C are shifting their focus from traditional human resource expansion to massive expansion of AI computing power infrastructure to meet the surge in cloud AI inference computing power resources. The database software and cloud computing super giant Oracle Corporation explicitly admitted in regulatory documents that AI technology deployment has led to and may continue to lead to a reduction in employees. The latest estimation data from the Wall Street financial giant Goldman Sachs Group, Inc. shows that the global AI capital expenditure benchmark model is expected to increase from $765 billion per year in 2026 to $1.6 trillion per year in 2031, with a cumulative capital expenditure of about $7.6 trillion from 2026 to 2031. The demand for power in US data centers is expected to increase from 31GW in 2025 to 66GW in 2027. Morgan Stanley said that the AI computing power arms race is entering the stage of systemic expansion, and the institution's expected capital expenditure for major US tech giants in 2026 has been significantly increased from $433 billion a year ago to $805 billion, with capital expenditure in 2027 expected to reach $1.1 trillion, revised up from the previous projection of $950 billion. From Xbox to sales consulting teams, Microsoft Corporation's new round of layoffs is looming! Tech giants are entering the stage of "human resources exchange for computing power" Information from informed sources indicates that the upcoming layoffs are expected to be announced as early as next week. According to reports, this restructuring-style layoff will cover multiple business departments of Microsoft Corporation, especially affecting the Xbox gaming business department, as well as sales and consulting related positions. Earlier in June, The Information also reported separately that this OpenAI major shareholder and cloud computing platform leader, as well as the developer behind Windows, is considering structural options for its Xbox gaming business department, including potential major separations or complete restructuring as a wholly-owned subsidiary. This latest layoff decision will also follow the historical pattern of comprehensive restructuring of the operational business departments of Microsoft Corporation immediately after the end of the fiscal year on June 30. Although a 2.5% reduction rate means thousands of positions will be affected, this round of layoffs is significantly smaller than previous ones; in July 2025, this tech giant implemented one of the largest layoffs in recent years, cutting nearly 4% of employees, about 9,000 positions, surprising global investors. Amid this action, Microsoft Corporation continues to balance between various core business operating costs, transferring some redundant and cumbersome resources from mature on-site teams and consumer business departments to maintain its current core artificial intelligence computing power infrastructure-related massive capital investment to meet the almost endless demand for AI cloud inference computing power. This restructuring also reflects a broader trend of tightening spending in US tech companies, with major business departments focusing on reducing staff teams that can be replaced by agent-based AI workflows to fund expensive AI computing infrastructure projects. These strategic large-scale layoffs remain one of the dominant operational themes in the entire tech industry this year. Meta, the parent company of Facebook (META.US), has planned to cut 10% of its workforce, while e-commerce and cloud computing supergiant Amazon.com, Inc. (AMZN.US) plans to cut around 16,000 positions globally. This trend is not limited to the tech industry, as major leaders in traditional media and financial industries are also making similar adjustments to adapt to the efficiency of human resources in the AI era and the overall trend of labor productivity transformation. Microsoft Corporation's new round of layoffs reveals the new capital discipline of tech giants: compressing inefficient positions and prioritizing AI infrastructure for capital allocation Following Oracle Corporation's significant reduction of 21,000 employees in the past 12 months, Microsoft Corporation plans to reduce less than 2.5% of its global workforce, affecting departments including sales, consulting, and Xbox. Meanwhile, US technology, media, and even financial companies are simultaneously controlling costs and investing heavily in AI computing power infrastructure or AI application deployment processes. There is no doubt that the logic of "AI disrupting everything" has begun to ignite a comprehensive revolution in enterprise operating efficiency. For example, Block, led by Twitter co-founder Jack Dorsey, laid off over 4,000 employees in one go, nearly half of the company's total workforce. The company's public statement shows that agent-based AI tools in the AI intelligent agent model allow smaller teams to maintain more efficient operations; its CFO further stated that the business efficiency brought about by focusing on agent-based AI workflows significantly increases, and the deep layoffs triggered are "almost inevitable" for any enterprise. The executive team at Microsoft Corporation continues to focus on continued "organizational streamlining" at fiscal year transition points: human-intensive or growth-constrained departments such as Xbox, sales, and consulting are compressed, while Azure AI, Microsoft 365 Copilot, Foundry, large AI model hosting, cloud inference AI computing rental platforms, and enterprise AI workflow ecosystem are the capital priorities. Microsoft Corporation CFO Amy Hood had previously stated that Microsoft Corporation expects a year-over-year decrease in its workforce in the coming quarters and emphasized the improvement in operational speed, agility, and more streamlined responsibility teams. In other words, Microsoft Corporation is entering a stage of "exchanging human resource costs for computing power budgets" for future growth. If the monetization path of AI accelerates expansion, this will be seen by investors as a significant positive signal for improving capital efficiency. This also demonstrates that Microsoft Corporation's new round of layoffs is not a defensive move against collapsing demand. Instead, it is highly related to the trend of cost reduction and efficiency improvement under the "AI disrupting everything" trend, and is a very typical path of capital reallocation for enterprises in the AI era: reducing low-efficiency mature businesses, low-growth or high-pressure profit-margin human-related operating costs, and focusing on transferring operational leverage to high-density AI data center construction processes to meet exponential computing power demand, striving for higher capital-intensive AI computing power stack budgets to replace traditional human resource expansion--focusing more on AI GPU/AI ASIC, HBM, data center CPU, data center optical interconnection systems, switches, liquid cooling, core power equipment, and AI network security platforms, etc. These core links in the AI computing power chain will continue to be the most critical "enterprise budget migration beneficiary chain" in the capital market. The latest expectations from firms such as Morgan Stanley and Goldman Sachs Group, Inc., on Wall Street underscore the bottleneck in the AI computing power infrastructure supply chain has expanded from "large-scale purchase of GPUs/ASICs" to "simultaneously addressing the entire delivery process of AI data centers, including power equipment, liquid cooling, data center CPUs, DRAM/NAND/HBM, data center optical communication/interconnection, high-performance Ethernet network infrastructure, transformers, gas turbines, etc.". Morgan Stanley predicts that close to $30 trillion in AI-related infrastructure investment will flow through the global economy by 2028, and over 80% of the expenditure is still ahead.