Microsoft announced on Tuesday (15) a mass layoff of 3% global workforce, affecting around 6,000 people.

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According to a statement published by CNBC, the cuts are happening worldwide and involve various levels of jobs and sectors, including the LinkedIn division. Brazilian employees were also laid off, according to G1.

Why did Microsoft do a mass layoff?

In a note published in the international press, the company argues that it is “making organizational changes necessary to better position the company for success in a dynamic market”.

The layoffs are not related to employee performance, according to the note, but to “reduce management layers”. It’s worth noting that Big Tech makes periodic cuts, but none as significant as the one announced this week.

It’s estimated to be the largest cut since the 2023 layoff of 10,000 employees. On the other hand, the company’s last quarterly report showed a net profit of $25.8 billion in the last fiscal year, ending in March this year.

According to technology and innovation writer Arthur Igreja, the cuts are also related to Microsoft’s investments in AI. It’s worth noting that recently, the company’s CEO, Satya Nadella, said that about 30% of the company’s code is already programmed by artificial intelligence.

“The issue is not a layoff due to bad performance, the company has done well and presented an increase, however, we need to analyze the investments and AI. Microsoft needs to become even leaner to double, to triple this bet on artificial intelligence. The AI has generated value for the company, and it makes sense to streamline the operation to have more capital available to accelerate the business.

Arthur Igreja also recalls investments cuts in other areas in the past “It’s a structural change, just like it happened when they reduced investments in computing, augmented reality, and spatial computing, and now all the capital flows to cloud and AI. This layoff is related to productivity, AI, and an internal reprioritization of priorities.”

Regarding the layoffs in Brazil, market researcher Cristiane Tarricone says that the change in command of the national division, with a new CEO since December last year, also has an impact on the local organization of jobs:

“Although we don’t have the details of the local impact, only reports from affected Brazilian employees, it’s important to consider that the operation is under the leadership of a new CEO. It’s expected that she will imprint her own vision for the local operation, which includes repositioning and evaluating the team’s performance, especially at the beginning of a new fiscal year.”

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