Key Highlights:
- Over 15,000 Microsoft employees laid off in 2025.
- AI skills now required for job performance reviews.
- Traditional sales roles replaced by technical "solutions engineers."
Microsoft is changing fast in 2025. The company has let go of more than 15,000 employees this year and is now asking the remaining staff to improve their AI skills. In internal messages, Microsoft has clearly told employees that using AI is no longer a choice—it’s now a must for everyone, no matter the job or level.
One of the biggest changes is how AI is now linked directly to employee performance. Julia Liuson, who leads Microsoft’s Developer Division, told managers that using AI should be part of how an employee’s work is judged. This means that in future performance reviews, how much and how well someone uses AI tools like Microsoft Copilot could affect their ratings and possibly even their job.
The company is also changing its sales team. Microsoft used to rely on traditional salespeople, but now it wants to replace them with more technical experts called "solutions engineers." These engineers won’t just sell products—they will also be able to show how Microsoft’s AI tools can help customers directly. This shift is part of a larger plan to turn Microsoft into what it calls the “Frontier AI Firm.”
This big push towards AI comes even as Microsoft is spending nearly $80 billion this year on AI infrastructure. That’s a huge investment, but it also means the company is looking to save money in other areas—hence the job cuts. The most recent round of layoffs, which affected around 9,000 employees, hit hard in the Xbox gaming division and among sales teams. Earlier cuts in May and June removed about 6,000 jobs and a few hundred more.
