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Microsoft to Cut Around 4% of Workforce Amid Heavy AI Investment Costs

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Microsoft announced it will lay off nearly 4% of its global workforce as part of efforts to control costs while investing heavily in artificial intelligence infrastructure. The company, with about 228,000 employees as of June 2024, had already begun layoffs in May affecting around 6,000 workers, primarily in sales roles.

The tech giant has pledged $80 billion in capital spending for fiscal year 2025, but the soaring costs of expanding AI capabilities have pressured profit margins. Microsoft’s cloud margin for the June quarter is expected to decline compared to the previous year.

In addition to workforce reductions, Microsoft plans to simplify its organizational structure by reducing management layers and streamlining products, processes, and roles. The gaming division, including its Barcelona-based King unit known for Candy Crush, will also see job cuts of about 10%, or roughly 200 employees.

Microsoft’s layoffs follow a broader trend among Big Tech companies investing in AI, with peers like Meta trimming about 5% of its lowest performers, Alphabet cutting hundreds of jobs, and Amazon reducing staff across various segments amid economic uncertainties and rising operational costs.

Paramount to Cut 3.5% of U.S. Workforce Amid Industry Disruption

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Paramount Global is set to lay off 3.5% of its U.S. workforce as part of ongoing efforts to adjust to sweeping changes in the media industry, according to an internal memo reviewed by Reuters. The job cuts, announced to employees on Tuesday morning, may eventually extend to some international staff, the memo from the office of Paramount’s three co-CEOs indicated.

This new round of layoffs follows a previous 15% staff reduction announced in August 2024. The moves come as Paramount, like many traditional media companies, faces mounting challenges due to the rapid shift away from cable television toward streaming platforms such as Netflix. The company’s leadership cited the broader “generational disruption” affecting the industry as millions of consumers continue to abandon pay-TV subscriptions.

“We are taking the hard, but necessary steps to further streamline our organization starting this week,” co-CEOs George Cheeks, Chris McCarthy, and Brian Robbins stated in the memo.

As of December 31, 2024, Paramount employed approximately 18,600 people globally. CNBC first reported the latest job cuts on Tuesday.

The layoffs occur as Paramount is in the midst of attempting a major corporate merger. The company has proposed an $8.4 billion deal with Skydance Media, led by billionaire David Ellison. However, regulatory approval for the merger remains pending. Complicating matters is a $10 billion lawsuit filed by former U.S. President Donald Trump against CBS News, part of Paramount Global, over allegations that a 2020 interview with then-vice president Kamala Harris was deceptively edited to her advantage.

Amazon Cuts Jobs in Books Division Amid Ongoing Restructuring Efforts

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Amazon has implemented another round of job cuts, this time targeting its books division, including its Goodreads review platform and Kindle operations. The company confirmed on Thursday that fewer than 100 employees were affected as part of an ongoing effort to enhance efficiency and better align with its evolving business strategy.

In a statement, an Amazon spokesperson explained, “As part of our ongoing work to make our teams and programs operate more efficiently, and to better align with our business roadmap, we’ve made the difficult decision to eliminate a small number of roles within the Books organization.”

These latest cuts are part of a broader trend of targeted layoffs at Amazon over the past year. The company has previously trimmed positions across several units, including its devices and services division, the Wondery podcast business, stores, and communications teams. The job reductions reflect CEO Andy Jassy’s broader initiative to streamline Amazon’s organizational structure, which has included efforts to minimize bureaucracy by reducing layers of management.

Despite the cuts, Amazon has shown modest workforce growth this year, adding approximately 4,000 jobs in the first quarter compared to the final quarter of 2024, according to a recent company disclosure. However, the overall pace of hiring remains cautious as Amazon continues to navigate a shifting economic environment and seeks to balance growth with cost control.

The job reductions were first reported by Business Insider and come as Amazon’s stock closed 0.3% higher on Thursday. However, shares remain down 5.6% year-to-date, reflecting broader market pressures and investor concerns about the tech sector’s growth trajectory.

Amazon’s books business, long a core component of its original e-commerce operations, remains significant but is facing shifting consumer habits and increased competition across both physical and digital reading platforms. The company’s ongoing restructuring highlights its attempt to adapt to changing market dynamics while optimizing operations across all business units.