Microsoft and Meta have recently announced job cuts or buyouts impacting possibly 23,000 jobs. The staff reductions come as the tech giants funnel massive resources into building out their AI capacity, a trade-off that has become common across the industry in recent months.
Bloomberg reported that Meta released an internal memo to its employees on April 23 that it will begin laying off 10% of its staff from May 20, as well as closing recruitment for thousands of roles that are currently open. That same day, Microsoft also informed staff that it would be offering voluntary buyouts affecting thousands of employees in the US.
The job cuts follow many that have been announced across the tech sector in the past year. According to Trueup, which tracks publicly known downsizing plans in the industry, Oracle slashed 30,000 jobs in March, while Amazon has reportedly cut around 30,000 jobs in multiple rounds since October 2025. US tech firm Block cut roughly 40% of its staff in February, despite rising profits in the past year, according to Forbes. The company's stock reportedly surged 22% after the announcement.
While tech layoffs at some companies are attributed to over-hiring during the Covid-19 pandemic, some have also stated that they aim to free up funds to invest in building AI data centers and streamline their operations. While Meta and Microsoft are companies valued in the trillions of US dollars, they both plan to spend considerable sums on AI. Meta plans to invest US$600 billion in AI infrastructure by 2028, while Microsoft is forming deals across the world for AI compute capacity.
Microsoft's first-ever large-scale buyouts
According to Bloomberg, Microsoft's buyouts could affect 7% of its US employees, marking the first time in the company's history to pursue buyouts of this scale. As of June 2025, the company employed 125,000 people, meaning that roughly 8,750 workers could be eligible for the program.
Microsoft workers whose age and years of service total at least 70 are reportedly eligible for the buyout program, although those on sales incentives plans or who are in some senior positions are excluded, according to a memo reviewed by Bloomberg.
The company has initiated several rounds of job cuts throughout 2025, including more than 15,000 employees across its Xbox, sales, and other departments. CNBC reported that 9000 cuts were announced in July, following another 6000 jobs slashed in May.
Meanwhile, the tech giant has announced plans to pour billions into boosting its AI capacity in sites around the world, with investments worth US$18 billion and US$10 billion in Australia and Japan reported by Reuters this month. According to the Wall Street Journal, Microsoft has created a unified team for its AI product Copilot amid a drop in the company's shares this year and investor concern about its struggle to build out its own AI offerings and models.
Meta's fluctuating workforce
According to Bloomberg, Meta plans to slash roughly 8000 jobs, as well as cancel 6000 current job openings. In the company's memo announcing the cuts, chief people officer Janelle Gale noted that the company was informing staff of the layoffs early because its plans had already been leaked.
"We're doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we're making," wrote Gale in the memo, possibly referencing Meta's AI spending. "I know this is unwelcome news, and confirming this puts everyone in an uneasy state, but we feel this is the best path forward, given the circumstances."
Meta earlier this year laid off 1500 workers in its Reality Labs division, which is responsible for the company's augmented and virtual reality efforts, including its metaverse development, according to the Wall Street Journal.
The publication noted that this week, the company unveiled a tool to track workers' mouse movements, keystrokes, and click locations in order to teach "the next generation of our AI models to use computers." Meta's technology chief, Andrew Bosworth, reportedly outlined in a memo that the company is working toward a future where AI agents do the bulk of work while humans' role is to manage, review, and improve the agents.
Meta has periodically reduced its workforce since the company nearly doubled its staff during the pandemic to reach 87,000 workers, according to the Wall Street Journal. The tech company cut 11,000 roles in 2022, shrinking its workforce by another 10,000 in 2023 to build "efficiency". After employee numbers climbed again in the following years, Meta's leadership downsized several times again in 2025.
Article edited by Jack Wu
