LinkedIn Cuts 875 Jobs While Microsoft Pours Billions Into AI

LinkedIn is cutting about 875 jobs, roughly 5% of its workforce, even after the Microsoft-owned professional network told investors its revenue grew 12% last quarter. The reductions, confirmed in a memo dated May 14, reach teams across global operations, marketing, engineering and product.

Those cuts land as Microsoft commits roughly $190 billion to data centers and chips this calendar year. The memo from LinkedIn’s leadership offers an unusually clear look at how that spending gets paid for, even inside a unit that is still growing.

LinkedIn Trims 5% While Revenue Climbs 12%

Daniel Shapero, who became LinkedIn’s chief executive in April after years as chief operating officer (COO, the executive who runs day-to-day operations), set out the reductions in a memo first reported by Business Insider. He wrote that the company needs to “operate more profitably” and to “reinvent how we work, with agile teams focused on our highest priorities.” LinkedIn employs about 17,500 people, so a 5% reduction works out to roughly 875 roles.

A LinkedIn spokesperson framed the move as routine. “As part of our regular business planning, we’ve implemented organizational changes to best position ourselves for future success,” the company said in a statement. The teams in the firing line span the Global Business Organization, marketing, engineering and product.

Headcount is only part of it. The memo also lists several cost lines the company plans to pull back on:

• Marketing campaign spend
• Outside vendors and contractors
• Customer events
• Underused office space

Why a Profitable Division Still Has to Cut

The reduction is hard to square with the numbers LinkedIn just posted. Revenue rose 12%, or $521 million, in the quarter that ended March 31, with gains across every line of business, according to the segment revenue breakdown for Microsoft’s fiscal third quarter. By most measures, this is a healthy business.

The memo points toward priorities rather than performance. LinkedIn’s leadership wants fewer, leaner teams and more money flowing to “infrastructure.” In Microsoft’s vocabulary, infrastructure means the data centers and processors that run AI (artificial intelligence) services such as Copilot.

One line did most of the work in the memo:

We need to reinvent how we work, with agile teams focused on our highest priorities, and by shifting investments toward areas such as infrastructure to fulfill our mission and vision over the long term.

That sentence ties a local decision to a company-wide one. The same logic, trim the established workforce and redirect the savings, runs through nearly every Microsoft division this year.

The $190 Billion Number Behind the Memo

Follow the money and the cuts lead to one of the largest construction sprees in corporate history. Microsoft told investors in late April that it expects capital spending of roughly $190 billion across calendar 2026, the cost of building and equipping data centers, with most of it aimed at AI compute.

The payoff is already showing up in results. Microsoft’s AI business passed a $37 billion annual revenue run rate last quarter, up 123% from a year earlier, while total company revenue hit $82.9 billion, detail confirmed in the company’s fiscal third-quarter 10-Q filing. The hardware behind that growth, mostly graphics processing units (GPUs, the chips that train and run AI models), is expensive, and the bill keeps climbing.

• $190 billion: Microsoft’s planned calendar-2026 capital spending, most of it AI infrastructure.
• $31.9 billion: capital expenditure in the March quarter alone, up 49% year over year.
• $37 billion: the annual run rate of Microsoft’s AI business, up 123%.

LinkedIn Joins a Big Tech Layoff Pattern

LinkedIn is not alone, and not even close to the biggest. More than 142,000 tech jobs have been cut in 2026, according to industry layoff trackers, many of them at companies posting record profits.

The common thread is capital. Amazon, Microsoft, Alphabet and Meta have together committed close to $700 billion in capital expenditure for the year, roughly double the 2025 figure, with the bulk going to AI data centers. Several of those firms have described the headcount cuts and the infrastructure spend in the same breath. The scale differs by employer, but the direction is identical.

Which Jobs Move and Which Ones Stay

The cuts are not landing evenly. Inside Microsoft and its peers, the roles being trimmed and the roles still being chased look like they belong to two different industries.

The Generalist Layer Shrinks

Reductions are concentrated in long-tenured generalist work: enterprise operations, sales, recruiting, marketing, back-office support and routine engineering. LinkedIn’s affected teams fit that profile neatly. These are jobs where automated tools now handle a growing share of the routine load.

The youngest coders are feeling it too. Stanford’s Institute for Human-Centered Artificial Intelligence (HAI) found, in its 2026 AI Index report on developer employment, that hiring of software developers aged 22 to 25 has dropped nearly 20% since 2024, concentrated in boilerplate coding and scripted testing that AI tools increasingly cover.

AI Roles Keep Hiring

At the other end of the ladder, demand is fierce. Microsoft exempted its AI and Copilot teams from earlier hiring slowdowns, keeping engineers on services such as GitHub Copilot and Azure AI. Roles in machine learning infrastructure, model evaluation and AI safety remain in short supply across the sector.

For workers trying to read the shift, the pattern looks roughly like this:

• Shrinking: routine engineering, sales operations, recruiting, marketing, back-office support
• Holding or growing: machine learning infrastructure, model evaluation, AI safety, applied research
• The dividing line: whether a task can be done by the same AI tools the capital spending is funding

Shapero’s First Test as Chief Executive

The timing puts pressure on a new leader. Shapero stepped into the top job in April and reports to Ryan Roslansky, the previous chief executive who now oversees both LinkedIn and Microsoft Office.

His first major act is a restructuring that asks a growing business to behave like a mature one. Revenue keeps rising, but the mandate from above is clear: deliver more with leaner teams and free up cash for the buildout.

That mandate is not unique to this one company, and it is not easing. With Microsoft guiding capital spending higher again into the current quarter, the demand on every division to “operate more profitably” only grows louder.

The reductions are a rounding error against a budget that size. Whether LinkedIn can keep its revenue climbing with a smaller team is the question its new chief executive now has to answer.