Microsoft is reportedly planning to cut thousands of jobs, primarily in its sales division, as the tech giant continues to redirect spending towards AI.

According to a Bloomberg report, the layoffs are expected to be announced early next month, coinciding with the end of Microsoft’s fiscal year.

Sources familiar with the matter told the media company that the cuts will not be limited to sales teams, though that division will bear the brunt.

The move comes on the heels of a separate round of layoffs in May, which saw around 6,000 jobs slashed, mainly in engineering and product teams.

Microsoft CEO Satya Nadella

The restructure comes in the same week Amazon CEO Andy Jassy confirmed that AI will “significantly” reduce the company’s corporate headcount.

Microsoft’s latest cuts reflect the company’s broader strategy to tighten spending in traditional areas while doubling down on AI.

The company has already shifted software sales to third-party resellers for small and medium business clients. Executives have warned more belt-tightening is coming, even as spending on AI infrastructure continues to surge.

Microsoft ended the 2024 financial year with 228,000 employees globally, including 45,000 in sales and marketing. The company traditionally announces organisational changes at the end of its fiscal year in June.

Microsoft has declined to comment on the reports.