On July 2, 2025, Microsoft announced a second wave of job cuts—eliminating approximately 9,000 roles globally (about 4% of its workforce)—in what came to be its largest layoff since 2023. This followed the May 13, 2025 announcement of 6,000 layoffs (~3% of the workforce), bringing the total number affected in 2025 to well over 15,000 employees worldwide, with significant cuts hitting its gaming division alongside sales and support roles (Global News, Reuters, CNBC via TechCrunch).
Microsoft has stated these job cuts are designed to streamline management layers and redirect resources toward AI and cloud services. The July layoffs targeted divisions such as Xbox gaming, customer support, sales, and mixed reality teams (Global News, CNBC via TechCrunch, Reuters).
Microsoft employs over 5,500 people in Canada, with its national head office in Toronto and several regional offices. While the company has not released specific figures on Canadian layoffs, the size and breadth of its operations suggest significant impact across the country. As reported by BNN Bloomberg, the layoffs are expected to affect Canadian offices, although Microsoft has not released a breakdown of impacted roles by country.
These layoffs come despite Microsoft’s strong financial performance—posting over $70 billion in revenue and approximately $26 billion in profit in its latest fiscal quarter—but signal an industry-wide shift as tech firms tighten in slower-growth areas to fund massive AI investments (Global News, Reuters July 2, Reuters May 13).
Layoffs Spark Concern Among Microsoft Employees
Employee reactions were immediate and emotional. Microsoft VP Scott Hanselman described May 13 as “a day with a lot of tears,” highlighting the personal toll of the layoffs (AP News). Notifications were reportedly sent via email across multiple departments that day (GeekWire).
On Reddit and other platforms, current and former Microsoft employees shared the impact on their lives and careers, emphasizing how sudden announcements compounded the challenge of finding new roles in a competitive tech market. For example, one user posted about being let go multiple times by Microsoft over the years and expressed concern about the growing difficulty of re-entering the job market (r/Layoffs post). Another thread captured employee frustration with the emotional toll of recurring layoffs (r/Layoffs thread). A discussion in r/CSCareers also reflected widespread anxiety about job security in the current tech climate.
Additional Impacts in Gaming and Sales
Subsequent reports confirmed that Microsoft’s July layoffs heavily impacted its gaming division, with approximately 9,100 roles cut across Xbox, ZeniMax, King (Candy Crush), and Turn 10 Studios. Entire projects were cancelled, including Perfect Dark and Everwild, and The Initiative game studio was closed (The Verge, July 2025).
At the same time, Microsoft began restructuring its sales and marketing teams, phasing out many traditional sales roles in favour of more technical “solutions engineer” positions. An internal memo revealed the company is consolidating six sales solution areas into three, as part of its strategy to brand itself as a “Frontier AI” firm (Business Insider, July 2025).
Microsoft’s Corporate Restructuring: What You Need to Know
A Microsoft spokesperson told Reuters and Bloomberg that these layoffs are part of a strategic restructuring, aiming to reduce organizational complexity and grow AI and cloud priorities (Reuters July 2, Bloomberg). Despite the workforce reduction, Microsoft continues to report strong quarterly earnings and is investing heavily in next-gen technologies such as AI infrastructure and cloud computing (Reuters July 2, Global News).
CEO Satya Nadella’s Remarks: In late July 2025, Nadella publicly addressed the layoffs, acknowledging the “emotional weight” of the job cuts and referring to them as the “enigma of success.” By this stage, Microsoft had eliminated roughly 15,000 positions since May, while continuing to post record profits and expand its AI and cloud investments (TechRepublic, July 2025).
Severance Packages for Microsoft Employees
If you’ve been laid off in Canada, you may be entitled to severance. Under Canadian employment law, severance pay depends on several factors, including:
- Length of service
- Age
- Position
- Availability of similar employment
Microsoft is required to provide fair severance packages to Canadian employees. However, initial offers may not always reflect what employees are legally entitled to. Monkhouse Law can help ensure you receive the compensation you deserve.
Wondering what you’re owed? Use our Severance Pay Calculator to quickly estimate your entitlement based on your age, tenure, and role.
Potential Issues with Layoff Notices
Layoff notices from Microsoft may not always comply with Canadian employment laws. Common issues include:
- Insufficient notice periods
- Improper classification of terminations (e.g., “temporary layoffs” that function as terminations)
- Severance offers that don’t align with your legal entitlements
Wrongful Dismissal and Microsoft Layoffs
If your termination was handled improperly or you were laid off without adequate notice or compensation, you might have grounds for a wrongful dismissal claim. Monkhouse Law has successfully represented clients in similar situations, securing fair compensation beyond initial severance offers.
A notable example is the case of B. v. Microsoft Canada Inc., 2020 ONSC 4286. Monkhouse Law acted as counsel for a Microsoft executive and successfully argued that Microsoft’s notice plan for limiting share awards was invalid. As a result, the employee received 24 months’ notice and bonuses throughout the notice period.
The court also awarded $120,000 in legal fees to cover the costs of the claim. This decision highlights the importance of reviewing severance and compensation packages carefully and demonstrates Monkhouse Law’s expertise in holding large employers accountable for wrongful dismissal.
How Monkhouse Law Can Help
At Monkhouse Law, we specialize in employment law and have extensive experience assisting employees affected by mass layoffs. We provide:
- Free 30-minute phone consultation to assess your case
- Negotiation services to secure fair severance packages
- Representation in wrongful dismissal claims
Contact Us for a Free Consultation
For those affected by these layoffs, understanding your legal rights is crucial. Employees may be entitled to severance pay or could have grounds for a wrongful dismissal claim if their termination was handled improperly. Monkhouse Law can assist in reviewing severance packages, negotiating fair compensation, and pursuing wrongful dismissal claims.
If you’ve been impacted by Microsoft’s layoffs, don’t navigate this process alone. Schedule a free 30 minute phone consultation with Monkhouse Law today to understand your rights and secure the compensation you deserve.