Microsoft announced 9,000 layoffs. What does that mean for WA state?

Redmond-based Microsoft announced earlier this month that it’s laying off about 9,000 employees. The news comes weeks after the tech giant said it’d be letting some 6,000 workers go.

So just how far-reaching will these layoffs be for Washington state?

The software company contends it’s boosting its agility by trimming down layers with fewer managers, cuts that coincide with recent investments in AI. The most recent round of layoffs amounts to less than 4% of Microsoft’s global workforce.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in an email.

Still, Microsoft’s latest layoffs are hitting hundreds of workers in its home state.

Microsoft layoffs affecting WA workers

Anneliese Vance-Sherman, chief labor economist with the state’s Employment Security Department, noted that layoff notices are just that: notices. Technically they’re called “Worker Adjustment and Retraining Notifications,” or “WARNs.”

The law requires employers with more than 50 workers to give 60 days’ notice of layoffs or closure, but that doesn’t always translate to the actual number of jobs, she said. Someone might get word they’re on the lay-off list and get out from under it by finding another job first.

WARN notice data posted by the state shows Microsoft’s latest layoffs are expected to affect 830 staffers in Washington at its Bellevue and Redmond locations, with a start date of Aug. 31.

Another two rounds of layoff notices issued in May and June were projected to affect a combined 2,290 Washington employees at the Redmond office.

Vance-Sherman noted these are typically high-wage jobs. But as for whether the surrounding areas will feel it?

“If they go through a spell of unemployment and they aren’t able to jump to another job, there would be some loss to the local areas where they live,” Vance-Sherman said. “For example, they wouldn’t be eating out as much, a lot of different things like that. So it’s subtle.”

To the extent there are any noticeable economic effects, they’re more likely to be felt in nearby communities, less so the state as a whole.

“It’s reasonable to expect that the impacts for this round of layoffs — as well as previous rounds of layoffs — would have been localized, based on whatever the nature of their work-location policy is,” Vance-Sherman said.

Microsoft announced in 2022 that employees should work in person at least 50% of the time, according to The Seattle Times. Over 53,000 staffers are located in the Seattle area.

Information sector and layoffs

Since the Great Recession, the information sector in Washington has ramped up in a major way, marked by a flurry of hiring and growth, Vance-Sherman said. While other sectors slumped during the pandemic, that arena proved resilient.

Many companies moved toward teleworking during the height of COVID-19, and people flocked to video games and virtual entertainment, she noted. Other tech-savvy habits — such as buying groceries online — were also adopted at a faster clip, likely giving the industry an artificial boost.

“The information sector really kind of helped lift us out of that pit really quickly,” she said. “But they also benefited substantially.”

Then in 2023 into 2024, the information sector saw a drop-off and plateau in employment, she said. Roughly 3,200 Washington-based Microsoft workers in all were issued layoff notices in 2023.

To Vance-Sherman, that information-sector-worker decline makes sense. Organizations that rushed to invest in teleworking kits during COVID-19 now have everything set up for remote work, she said. Now it’s often a matter of just renewing software licenses.

“If we think in terms of supply and demand, there wasn’t as much demand for that innovation, just more maintenance,” she said. “But then we see AI coming in … possibly creating jobs, but also possibly reducing some of the workload.”

Washington in AI race

Microsoft may be slimming down its workforce, but it’s also beefing up its AI efforts.

This week, the tech titan committed $4 billion over five years to support schools and nonprofits with AI training and tools, according to GeekWire. It also invested a record $80 billion in the past fiscal year in cloud and AI infrastructure, although the layoffs haven’t been explicitly tied to AI.

Now, as states vie to woo the burgeoning AI sector, certain data indicates the Evergreen State could emerge as a national leader. A recent report from edu-tech company Brainly ranked Washington as the eighth-most-prepared state to “win the AI race.”

But could some tech workers effectively be innovating themselves out of a job?

“It feels almost like the same people that are likely to be impacted by AI are the ones who are creating AI,” Vance-Sherman said. “Even within the same company, you might have a situation where one division is being heavily invested in because of moving AI forward — and some jobs across the hall might be going away because of AI.”

This story was originally published July 13, 2025 at 5:00 AM.

Simone Carter

The Olympian

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