Microsoft’s annual report reveals the company employed around 223,000 people as of June 30th. That’s 5,000 less than the 228,000 people employed in 2025. It’s the first time Microsoft has had a headcount reduction in 10 years, after the gutting of the Nokia phone business in 2015 and 2016. The reduction comes as Microsoft has laid off more than 9,000 employees over the past year.