REDMOND, Washington: Microsoft is the latest tech giant to announce significant job cuts, as the financial strain of building next-generation AI capabilities begins to reshape workforces across the industry.

The company said this week it will lay off nearly 4 percent of its global workforce—roughly 9,000 jobs—as it looks to streamline operations and control costs.

With around 228,000 employees as of June 2024, Microsoft had already trimmed headcount in May, affecting about 6,000 workers. Bloomberg News reported last month that the company was planning additional cuts, particularly in sales.

The layoffs come as Microsoft commits to massive investments in AI. The company has pledged US$80 billion in capital spending for fiscal 2025, much of it earmarked for building and scaling AI infrastructure. But these investments have begun to weigh on profitability—its June quarter cloud margins are expected to shrink compared to last year.

To offset these pressures, Microsoft said it would "reduce organizational layers with fewer managers" and streamline its products, procedures, and roles.

The Seattle Times was the first to report the layoffs. Separately, Bloomberg News reported that Microsoft's King division, based in Barcelona and known for developing the Candy Crush video game, is also cutting about 10 percent of its staff, or around 200 employees.

Microsoft confirmed to Reuters that the gaming division had been affected by the layoffs, though it clarified that the job cuts do not impact the majority of the unit.

Other major tech companies making aggressive AI bets have also implemented job cuts. Meta, the parent company of Facebook, said earlier this year it would reduce about 5 percent of its "lowest performers." Alphabet's Google has laid off hundreds of workers in recent months, and Amazon has trimmed roles across several business lines, including its books division, devices and services, and communications teams.

Across Corporate America, a combination of economic uncertainty and rising costs has prompted companies to restructure, streamline, and prepare for further financial pressure. Microsoft's latest move underscores how even the most profitable players are making hard choices to sustain their AI ambitions.