Three employees with direct knowledge of the decision in which they were cited by the members of the press had reported on Thursday that Microsoft leaders had instructed managers at key divisions, such as its cloud unit and North American sales groups, to halt new hiring in recent weeks.
They cited the need to reduce expenses and increase profits; according to the firm, the executives instructed managers to stop recruiting any new applicants who did not already have a job offer, according to the report.
The group developing Microsoft’s Copilot AI tool is among the divisions that continue to hire despite the company-wide freeze, according to the article.
A request for comment from Reuters was not immediately answered by Microsoft.
As Microsoft’s fiscal year draws to a close in June, it has implemented a hiring freeze.
Like other tech giants, the corporation wants to cut expenses in order to pay for large expenditures in AI technology.
Earlier this month, Reuters revealed that Meta was preparing extensive layoffs that might impact 20% or more of the company. This week, a source told Reuters that the parent company of Facebook was firing several hundred employees from several teams.
Over the past six months, Amazon has also laid off about 30,000 corporate workers, beginning with a group of about 14,000 white-collar workers in October. The company has linked the layoffs to productivity gains from artificial intelligence and reversed over hiring during the pandemic.
Microsoft, which employed over 228,000 people worldwide as of June 2025, has been under increasing pressure to demonstrate the profits from its AI investments. Investors were alarmed by the company’s sluggish growth in cloud computing during the October–December quarter and its record capital expenditure on artificial intelligence.
The Windows manufacturer last announced widespread layoffs in July, reducing its employment by roughly 4%. Microsoft’s hiring freeze targets North American corporate sales and Azure SMB units. It’s not company-wide, existing offers stand, and engineering and Copilot AI teams continue hiring. The move aims to offset heavy AI investments and a gross margin gap following slower cloud growth. The move mirrors broader tech trends, Amazon and Meta have also reduced staff or shifted hiring to focus on AI efficiency. Earlier in 2026, Microsoft executives dismissed mass layoff rumours as “100 percent made up,” though this targeted freeze signals a more measured cost-cutting approach.
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