The layoff season escalates: three giants cut in just two days
- Abdel El Ayyadi
- Jul 20
- 2 min read
This is a follow-up to The Layoff Season Has Begun — And No One Is Safe, published earlier this week.
Just two days after I published my latest article on the return of mass layoffs, Microsoft, Amazon AWS, and Scale AI all made fresh cuts.
If you needed more proof that layoff season isn’t just back—but evolving—this is it.
What’s new isn’t just the volume. It’s the language.These companies aren’t citing market downturns or financial stress.They’re citing “alignment,” “strategic focus,” and “long-term priorities”—while quietly removing the very teams that helped build the growth they once celebrated.
The Cuts at a Glance
Company | Layoffs (July 16–18) | Focus of Cuts |
Microsoft | 9,000+ | Gaming (Xbox, ZeniMax), product, dev |
Amazon AWS | 100+ | Certification, GenAI GTM, support |
Scale AI | 700+ total | GenAI engineering, contract labeling |
Microsoft: Cutting through its own future
What they said:
“We are aligning resources to our most important strategic priorities—particularly AI, cloud infrastructure, and Copilot.”— Internal memo, July 17
What they did:Let go of 9,000 employees, mainly in Xbox, ZeniMax, and support teams. Microsoft’s 2025 layoff count now exceeds 15,000.
As we all know, “alignment” is a polite word for realignment—minus the accountability.These aren’t underperforming divisions. They’re product groups and dev teams that were fully funded, fully functioning, and just no longer fit into the quarter’s narrative.
You don’t “align” by cutting gaming studios and replacing them with AI scripts. You pivot. And you pretend it was always part of the plan.
Amazon AWS: When profit doesn’t protect you
What they said:
“To better align with our business priorities and ensure long-term customer success, we’ve made the difficult decision to eliminate several hundred roles.”— AWS spokesperson, July 17
What they did:Removed hundreds of positions in marketing, training, and GenAI customer support—just weeks after AWS posted 17% revenue growth and a 23% profit increase.
It’s hard to accept that level of profitability and still watch teams get removed. But this isn’t about margins. It’s about optics.
AWS is betting big on next-gen AI infrastructure, and any function that doesn’t directly advance that bet is now considered drag. No matter how successful it was last quarter.
Scale AI: The GenAI hangover begins
What they said:
“We ramped up our GenAI capacity quickly to meet demand—but must now correct that trajectory and return to a leaner structure.”— Internal memo, July 16
What they did:Laid off 14% of full-time employees (~200) and terminated 500+ contractors across labeling and infrastructure teams.
Scale was one of the most aggressive GenAI recruiters in 2023–2024. Now, it's admitting the build-up wasn’t sustainable. But rather than hold leadership accountable, the company is offloading the course correction on the same people who helped them scale in the first place.
That’s not “returning to focus.” That’s passing the cost of ambition to the builders.
Missed the first part?
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