Microsoft employees aren't getting much time to take a breath between layoff rounds as thousands could be let go in early July, according to news reports.

The Redmond, Washington-based tech giant announced in mid-May that it was firing more than 6,000 employees companywide, including 1,985 based in Washington. Less than three weeks later, Microsoft terminated another 305 Washington employees.

Bloomberg News reported last week that Microsoft was planning another round, aimed at thousands of people with a heavy emphasis on sales and marketing roles. The outlet reported Tuesday that more cuts were coming for Microsoft's gaming division, doubling down on a report from The Verge in early June that gaming layoffs were looming around the end of the fiscal year on June 30.

Microsoft did not respond to a Seattle Times request for comment.

The company's spate of layoffs and their impersonal nature — mass conference calls and termination notices in inboxes — feed paranoia among some employees. Several who survived layoffs in May say the broad selection of roles made them wonder if they'd be next.

I wasn't worried about getting laid off in my first year or so here," said a data scientist who's been with Microsoft for several years. She asked not to be named to protect her job. "But for the past six months, I've been pretty nervous about it."

She said there's not much communication from her managers about layoffs unless it affects her team or organization. News reports about layoffs comes out and employees rush to share them across direct messages and group chats between employees.

Unlike during a mass layoff in 2023, there wasn't companywide communication from C-suite members like CEO Satya Nadella when layoffs were announced in May.

"There's an etiquette that if you hear about layoffs you tell each other," she said. "But you won't always hear it from managers."

Other employees who were laid off recently said they were taken by surprise. The conventional wisdom in tech has been that software engineers and developers were largely safe from cuts, with valued skills that shielded them from a tough job market.

Paul Turek, an economist for the state Employment Security Department said that workers in tech have historically been mostly immune to contracting labor markets, but an industry shift toward artificial intelligence is upsetting that balance.

"There's a big shift in technology," Turek said. "We've always been bullish on job growth there, but the development of AI has been impacting it at an increasing rate.

Microsoft confirmed performance-based layoffs in January, following a report from Business Insider. The company said the layoffs in May and early June weren't based on performance but rather in an effort to streamline the company and flatten management layers.

Data from the state showed mostly non-managers were affected. Managers accounted for about 17% of the May layoffs.

Hit hardest among the almost 2,300 employees laid off in Washington since mid-May were software engineers and product managers, those who build products for Microsoft and those who help shepherd the development and launch.

More than 800 Washington-based software engineers were let go from the company in May. More than 60 software engineers were among the wave of 305 people let go in early June.

Cuts to Microsoft's gaming division, which includes Xbox, would be at least the third round targeting that unit since the beginning of 2024. Months after Microsoft closed its $69 billion purchase of video game maker Activision Blizzard in October 2023, the company axed 1,900 roles across its gaming division. Activision Blizzard employees were included.

Microsoft laid off another 650 gaming employees in September 2024.

In Microsoft's 2024 fiscal year, which ended in June 2024, gaming accounted for $21.5 billion of the company's $245.1 billion annual revenue. The division experienced a boost, thanks to the Activision Blizzard acquisition. The year prior, it brought in $15.4 billion, down from 2022.

Microsoft's recent bumpy growth in gaming is driven by the company's content and services, the games and cloud subscriptions it offers. But Xbox hardware revenue has declined for multiple quarters, sometimes offsetting the gains the divisions has made.

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