NEW YORK – Microsoft is planning to ax thousands of jobs, particularly in sales, as part of the company’s latest move to trim its workforce amid heavy spending on artificial intelligence (AI).

The cuts are expected to be announced early in July, following the end of Microsoft’s fiscal year, according to people familiar with the matter. The reductions won’t exclusively affect sales teams, and the timing could still change, said the people, who requested anonymity to discuss a private matter. 

The company declined to comment.

The terminations would follow a previous round of layoffs in May that hit 6,000 people and fell hardest on product and engineering positions, largely sparing customer-facing roles like sales and marketing. 

In April, Microsoft told employees it planned to use third-party firms to handle more sales of software to small and mid-size customers. 

The tech giant has ramped up its investments in AI, aiming to solidify its leadership as companies across industries accelerate the integration of AI into their products and services to maintain a competitive edge.

Amazon chief executive Andy Jassy said on June 17 that the rollout of generative AI and agents will reduce its total corporate workforce in the next few years.

Microsoft has planned a capital expenditure of US$80 billion (S$102.8 billion) this fiscal year, with most of it aimed at expanding data centres to ease capacity bottlenecks for AI services.

The company had 228,000 workers at the end of June 2024, 45,000 of them in sales and marketing. Microsoft often restructures teams and announces other changes near the end of its fiscal year, which closes in June. BLOOMBERG, REUTERS

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