Microsoft layoffs are making headlines again, and this time, they’ve hit software engineers and product managers the hardest. As the company doubles down on AI investments, it's clear that even coders—the people who build Microsoft's products—aren’t safe from job cuts in 2025.
According to official documents from Washington state, nearly 40% of the 2,000 job cuts in that region affected software engineers. These layoffs are part of a larger wave, as Microsoft announced plans to cut around 6,000 jobs company-wide. The Washington layoffs alone represent about a third of that total.
The biggest reason behind the cuts? Artificial intelligence. Microsoft, like many other tech giants, is pouring billions into AI development and data center infrastructure. At the same time, the company is trying to control costs and streamline its teams.
AI is now capable of writing and reviewing code—tasks once done entirely by engineers. In fact, Microsoft CEO Satya Nadella revealed that up to 30% of the code in some projects is now being written by AI tools. This is a clear signal that AI is changing software development in real time.
It’s not just engineers feeling the impact. Product managers and technical program managers made up nearly 600 of the layoffs in Washington, around 30% of the total. These are the people who oversee and coordinate software projects. In other words, many of the roles directly involved in building and shipping software products are being cut.
Interestingly, a smaller number of AI-focused roles were also included in the layoffs, though these seem to be the exception, not the rule.
While technical teams are shrinking, customer-facing roles like sales and marketing have mostly been left untouched. Microsoft has not shared much publicly about the layoffs, but internal reports suggest the cuts were part of an effort to reduce layers of management.
However, whether the layoffs truly streamlined operations is still up for debate. Around 17% of those laid off were managers, which matches the percentage of managers across Microsoft's workforce overall, according to the company’s 2023 diversity and inclusion report.
Microsoft isn’t alone in this shift. Other major tech firms like Salesforce and Workday have also made cuts this year, while hiring in AI-focused roles. Salesforce CEO Marc Benioff even said that the company will hire fewer engineers in 2025 because of AI tools taking over some of their responsibilities.
As the demand for AI grows, companies are reshaping their workforces. The trend is clear: roles that directly build or manage tech products are being re-evaluated, while positions that support AI development and sales are on the rise.
The future of coding jobs is changing fast. With AI automating parts of software development, developers and tech professionals may need to reskill or shift to more strategic or creative roles. While AI is unlocking new possibilities, it’s also forcing companies to rethink how they build and manage technology.
For anyone working in tech—or planning a career in it—now is the time to stay adaptable. Learning how to work with AI tools and staying current with industry trends could be the key to staying relevant in a rapidly evolving landscape.
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