Microsoft (MSFT) has confirmed that it is cutting jobs across departments based on employee performance.
The latest round of job cuts impacts less than 1% of Microsoft’s global workforce of nearly 230,000 people, said the company.
Microsoft’s latest cuts are small compared with its recent downsizing. In early 2023, the company laid off 10,000 employees in one round of layoffs.
As 2025 begins, Microsoft faces a more difficult relationship with artificial intelligence (A.I.) start-up OpenAI, which it has invested $13 billion U.S. in.
Over the summer, Microsoft added OpenAI to its list of competitors.
More recently, Microsoft chief executive officer (CEO) Satya Nadella used the phrase “cooperation tension” while discussing the relationship with OpenAI on a podcast.
Meanwhile, the Microsoft 365 Copilot A.I. assistant, which employs OpenAI technology, has yet to become pervasive within the business community.
Analysts at bank UBS (UBS) have characterised Microsoft’s Copilot rollout as “a bit slow/underwhelming.”
Still, Microsoft is promoting its growth opportunities, saying that revenue growth from its Azure cloud until will speed up in the first half of this year because of greater A.I. capacity.
Microsoft’s stock underperformed in 2024, rising 12% while the benchmark S&P 500 index registered a 23% gain on the year.
The company’s shares are currently changing hands at $424.56 U.S.
