Microsoft is braced to lay off hundreds of employees within its Azure cloud unit. This decision is part of a broad wave of job cuts that have impacted the technology and media sectors in 2024.
The layoffs will notably affect teams including Azure for Operators and Mission Engineering. Azure for Operators team will see as many as 1500 job cuts. These teams are important components of the Strategic Missions and Technologies (SMT) organization, established in 2021. SMT encompasses Microsoft’s “moonshot” projects such as quantum computing and space initiatives.
Context
This move follows a similar pattern seen earlier this year when Microsoft cut 1900 jobs at Activision Blizzard and Xbox. The tech industry as a whole has witnessed significant layoffs, with major players like Amazon and Salesforce also reducing their workforce by several hundred employees in 2024.
Despite the layoffs, Microsoft’s Azure cloud platform has been experiencing sharp growth, largely due to the company’s investment in artificial intelligence (AI) and its partnership with OpenAI, the creator of ChatGPT. This partnership has given Azure access to advanced technologies, boosting its edge in the cloud market.
Restructuring in Mixed Reality
Microsoft has begun a restructuring within its mixed reality organization. While the company will continue to sell its augmented reality headset, the HoloLens 2, the restructuring has led to layoffs in the department. Microsoft spokesperson Craig Cincotta confirmed to Reuters that despite these changes, the company remains committed to the United States Department of Defense’s IVAS program and will continue supporting existing HoloLens 2 customers and partners.
These recent layoffs have been taking place more than a year after Microsoft laid off over 10000 employees, a move that CEO Satya Nadella described as part of changing the company’s hardware portfolio. Since then, Microsoft has closed its acquisition of Activision Blizzard and initiated a push for “AI PCs” powered by Qualcomm chips.
Microsoft’s Justification
Microsoft has said that these layoffs are part of routine organizational and workforce adjustments. Cincotta emphasized, “Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.”
