• Microsoft lays off over 300, adding to 6,000 job cuts in 2025.
• AI tools write 20-30% of Microsoft’s project code, boosting efficiency.
• Tech giants like Google, Sales Salesforce also reduce hiring with AI automation.

Microsoft has laid off over 300 employees, the largest number in years. This comes after the company announced in May 2025 that it would be laying off 6,000 workers, bringing the total number of job cuts for the year to something significant. By June 2024, there were around 228,000 full-time employees working at Microsoft, and half of them were in the United States. Earlier, the job cuts mostly targeted software engineers, but the parts of the company affected this time have not been revealed.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said.

Layoffs are happening at major technology companies like Microsoft, Meta, and Google, as they focus more on artificial intelligence (AI) and data centers and reduce spending in other fields. AI coding tools that help automate some parts of software development are fuelling this change.

 At Microsoft, CEO Satya Nadella revealed at Meta’s LlamaCon conference last month that AI tools generate 20% to 30% of the code for company projects. “We’re seeing fantastic Python code, though its C++ capabilities are not that great,” Nadella told Meta CEO Mark Zuckerberg, noting that the effectiveness of AI-generated code varies by programming language. He also highlighted Microsoft’s growing reliance on advanced AI agents, which autonomously perform complex tasks like code reviews.

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This is happening with more than just Microsoft. As reported by Google CEO Sundar Pichai in a recent earnings call, the company now has AI writing “well over 30%” of its new code, which is higher than the previous 25% share in October. While he recognizes there’s still a way to go, Pichai said more employees are using AI-generated code, which signals a shift in acceptance.

In the same way, AI has helped Salesforce's force to increase efficiency, meaning fewer new employees are needed in engineering and customer service. These are meant to be assistants for us and they will likely allow us to reduce the number of people we hire and increase productivity among our staff,” explained Robin Washington, Sales forces chief financial and operations officer.

With more AI-focused automation, companies in the tech industry can cut costs, improve processes, and focus more on AI technologies. With increasingly advanced tools, large tech companies find themselves in a tight situation, trying to keep advancing in innovation while reducing jobs, which matters greatly for software development and the future beyond that.