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According to those familiar with the situation, Microsoft is planning to lay off thousands of employees, mostly in its sales business. The layoffs are expected to be announced in early July as the corporation continues to restructure in response to significant expenditures on artificial intelligence.

After cutting 6,000 employees in May and more than 300 more a few weeks later, the layoffs will be the Redmond-based software giant's third significant employment decrease of the year. Bloomberg initially reported the expected summer layoffs, and according to sources, the timing aligns with the beginning of Microsoft's new fiscal year in July.

The upcoming cuts will disproportionately target customer-facing roles, in contrast to prior rounds that predominantly hit software engineers and product developers. As of June 2024, about 45,000 of Microsoft's 228,000 employees work in the sales and marketing business.

This change was hinted at by the company in April when it declared that it would outsource more software sales to small and mid-sized businesses to other companies. Although sales teams will take the brunt of the cuts, sources told Bloomberg that they won't be the only ones affected.

Investments in realm of Artificial Intelligence

As it attempts to stay ahead in a rapidly evolving technological world, Microsoft is now placing more focus on artificial intelligence (AI) in the adage "keeping up with the times" and adapting to current trends.  To meet the increasing demand from companies implementing AI tools and services, the tech giant is making significant investments in data centers and AI research.

 According to the Bloomberg article, Microsoft has allocated over Rs 6.6 lakh crore ($80 billion) for capital expenditures for the current fiscal year.  Since the goal is to lessen the strain on current facilities that enable AI services, a significant portion of this investment will go into growing data center infrastructure.

IT professionals are often concerned about layoffs in the tech industry.  Andy Jassy, the CEO of Amazon, has issued a warning that job losses will eventually result from the incorporation of artificial intelligence (AI) into the corporate workforce.  Large digital businesses like Amazon, Meta, and Google reduced their workforce by thousands of employees following the COVID-19 pandemic.

 Microsoft, another tech behemoth, has now delivered a live, somber, and somewhat depressing presentation.