Business

HM Revenue & Customs has issued its first tax avoidance Stop Notices to an individual, ordering Paul Baxendale-Walker, a struck-off solicitor and former barrister, to cease promoting two schemes deemed abusive and artificial by the tax authority.

In a landmark move, HMRC confirmed that these Stop Notices mark the first time the orders have been issued to an individual rather than a company, underscoring the government’s intent to clamp down on tax avoidance regardless of how schemes are structured.

The two arrangements, promoted by Mr Baxendale-Walker, involve offshore trusts and complex structures designed to allow users to access their funds while avoiding tax. HMRC has assessed these as schemes without genuine business purpose, aimed solely at exploiting tax loopholes.

Jonathan Smith, HMRC’s Director of Counter Avoidance, said: “The courts have already concluded that Mr Baxendale-Walker designed and sold multiple tax avoidance schemes that don’t work as claimed. These Stop Notices send a clear message: we will use every tool at our disposal to protect public finances from tax avoidance.”

The notices were issued under the government’s strengthened anti-avoidance framework, which forms part of a broader strategy to close the tax gap and protect funding for vital public services.

Tax avoidance Stop Notices are formal legal orders requiring the recipient to immediately cease the promotion of specific schemes. Failure to comply can lead to significant financial penalties or even criminal prosecution.

Mr Baxendale-Walker, who has previously been the subject of legal action and enforcement proceedings related to tax avoidance, is now barred from marketing or facilitating these two specific schemes.

The schemes in question have now been added to HMRC’s list of tax avoidance arrangements subject to Stop Notices, which is available to the public on GOV.UK.

HMRC is calling on the public and professional advisers to report any continued promotion of these schemes. Anyone aware of Mr Baxendale-Walker continuing to market them is urged to contact the department via its website.

Individuals who believe they may have used a tax avoidance scheme — whether promoted by Baxendale-Walker or others — are advised to contact HMRC immediately by emailing: CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk

This move represents a significant step in the government’s ongoing effort to combat aggressive tax planning and signals that individual promoters, not just companies, are now firmly in HMRC’s sights.

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HMRC issues first individual tax avoidance Stop Notices to former solicitor Paul Baxendale-Walker

The number of female founders pitching to investors has risen by nearly half over the past decade, according to a new report from venture capital firm Fuel Ventures, offering a unique lens into the evolving face of UK entrepreneurship.

The report, compiled from ten years of pitch submissions to the firm, reveals a 45% increase in female-led startups since Fuel Ventures launched in 2014, with a particularly sharp 30% rise in the past five years alone.

With around 6,000 pitches now arriving each year — the equivalent of one every 88 minutes — the report provides an extensive data-driven overview of startup trends, from founder demographics to investor preferences and pitch timing.

Notably, 76% of successful pitches came from startups with co-founders, suggesting that collaborative leadership remains a key asset when raising early-stage capital.

While London still dominates as the most popular hub for startup activity, other UK cities are rapidly gaining ground. Birmingham has seen a 120% rise in founder activity over the decade, with Manchester close behind at 95% — a sign of the growing decentralisation of the UK startup ecosystem.

Fuel’s data also challenges the stereotype of the young tech founder, with a 35% increase in pitches from entrepreneurs over 40. The trend highlights a new wave of founders leveraging deep industry experience to launch ventures later in their careers.

As for what founders are pitching, AI is the buzzword of the moment — appearing in 86% of pitch decks reviewed in the last year, though Fuel notes that a growing proportion (20%) mention AI without featuring any real AI capability. Other frequently used terms include “disruption” (61%), “scale” (52%), “sustainability” (45%), and “pivot” (32%).

Timing, too, plays a surprising role. January and September see spikes in submissions — up 9% and 10% respectively — while decks submitted on a Tuesday were 18% more likely to lead to a follow-up than those sent on a Friday.

Fuel Ventures has seen it all — from ultra-concise three-slide pitches to sprawling 127-slide epics, though, interestingly, neither extreme secured funding.

Commenting on the findings, Fuel Ventures founder Mark Pearson said: “Every pitch deck tells a story — some better than others. We’re fortunate to have a front-row seat to the ambition, creativity and resilience of the next generation of entrepreneurs. It never gets old.”

Pearson added, with tongue in cheek: “One thing we’ve definitely learned: the team seems much sharper on a Tuesday than on a Friday afternoon. By then, I suspect their minds are already halfway to the pub!”

As Fuel Ventures celebrates a decade of backing early-stage founders, the report offers not just insights into how startups are pitching, but a broader picture of how UK entrepreneurship is evolving — more diverse, more experienced, and increasingly decentralised.

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Female founder numbers rise 45% in a decade, reveals new startup pitch data

The UK economy expanded at its fastest rate in over a year during the first quarter of 2025, as businesses ramped up investment and exports surged ahead of new US trade tariffs.

According to data from the Office for National Statistics (ONS), gross domestic product (GDP) rose by 0.7% between January and March, beating expectations from both the Bank of England and private sector forecasters, who had predicted 0.6%. The figure marks a significant acceleration from the 0.1% growth recorded in the final quarter of 2024.

Year-on-year, the economy is now 1.3% larger, representing the best quarterly performance since early 2024 and the fastest growth among G7 economies during the period.

The gains were led by a 0.7% rise in the services sector, which makes up around 75% of total UK output. Manufacturing and industrial production also contributed, with production output growing by 1.1% over the quarter. Construction remained flat.

The sharp uptick in business activity comes ahead of President Donald Trump’s April 2 tariff imposition on UK goods, which economists believe led to a front-loading of exports. The ONS reported a £2.4 billion rise in exports to the US during the first three months of the year — a clear sign, it said, of “changing trader behaviour ahead of tariff introduction”.

Total exports rose 3.5%, while business investment climbed nearly 6%, largely driven by orders for aircraft and transport components amid global trade uncertainty.

While government spending fell by 0.5%, particularly in health and education, modest consumer spending growth of 0.2% and a 0.9% rise in consumer-facing services helped offset the decline.

Chancellor Rachel Reeves celebrated the figures as a sign of post-pandemic recovery and international competitiveness, saying:

“Today’s growth figures show the strength and potential of the UK economy. In the first three months of the year, the UK economy has grown faster than the US, Canada, France, Italy and Germany.”

Despite the upbeat headline figures, economists have warned that the strong start to the year may not be sustained. The Bank of England has cautioned that underlying growth was likely closer to 0.1% for the quarter once temporary factors are stripped out.

Private sector surveys have already indicated that services output contracted in April, marking the first decline in two years, and several analysts expect a potential slowdown in Q2 due to trade frictions and the delayed impact of tax changes.

Bruna Skarica, economist at Morgan Stanley, flagged concerns about seasonal inconsistencies in the ONS’s GDP estimates: “The UK often shows strong early-year growth followed by sharp slowdowns, largely due to seasonal adjustment issues. We expect a contraction in the second quarter.”

Emma Reynolds, Treasury minister, struck a cautious tone, acknowledging on Times Radio that the figures pre-date the April rise in national insurance contributions for employers.

“We’re pleased the economy is making progress… but of course, we’ll have to wait for upcoming data to understand the full impact of recent policy changes.”

Still, with wages now outpacing inflation and interest rates gradually easing, the economy is on track to grow by around 1% in 2025, barring any major trade disruptions.

As global uncertainty lingers and tariff pressures mount, the challenge for the government will be sustaining momentum while navigating the complexities of post-Brexit trade, monetary policy, and fiscal reform.

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UK economy posts strongest growth in a year, driven by exports and business investment

Investor appetite for backing high-growth private companies through the UK’s flagship Enterprise Investment Scheme (EIS) has dropped significantly, with new HMRC figures showing a 20% fall in funds raised in the year to March 2024.

Companies secured just £1.6 billion through EIS last year, down from £2.0 billion the previous year and well below the post-pandemic peak of £2.3 billion in 2022. The number of companies benefiting also declined by 10% to 3,780.

Despite generous tax breaks, including income tax and capital gains tax relief for qualifying investors, the EIS appears to have been hit by caution among investors during a year characterised by economic headwinds and interest rate uncertainty.

In contrast, the sister Seed Enterprise Investment Scheme (SEIS) — designed for earlier-stage startups — saw a 25% surge in company participation, with 2,290 businesses raising a combined £242 million. The increase followed rule changes in April 2023 that raised maximum investment thresholds, offering greater flexibility and attracting more early-stage investors.

Across both schemes, the majority of investment continues to be concentrated in London and the South East, with around two-thirds of recipient companies headquartered in the region — prompting calls for greater regional diversification.

Christiana Stewart-Lockhart, director-general of the Enterprise Investment Scheme Association, acknowledged the dip in EIS activity but emphasised the scheme’s resilience:

“The EIS is an important success story and, despite the drop, it still drove more than £1.5 billion of private investment into nearly 4,000 growth businesses. Since their creation, the SEIS and EIS have channelled £34 billion into 59,000 businesses across the UK.”

She added that the association is beginning to see “green shoots” in the form of realised investments and follow-on rounds, suggesting a potential recovery in the coming year.

Mike Hodges, partner at accountancy firm Saffery, argued that now is the time for reform: “Perhaps it is time for an overhaul, especially at a time when government is keen to encourage growth. What’s more, with so much EIS/SEIS money focused on London and the southeast, this is especially pressing for the regions.”

While the government extended both the EIS and the Venture Capital Trust (VCT) scheme to 2035, providing a welcome sense of long-term continuity, some experts argue that simplification is now needed to make the schemes more accessible for both investors and companies.

Introduced in 1994, the EIS allows individuals to invest up to £1 million per tax year — or £2 million in knowledge-intensive companies — with upfront income tax relief and capital gains tax exemptions on qualifying gains. Loss relief is also available for shares held for at least three years.

As the UK looks to stimulate growth and innovation through private investment, attention may now turn to how the government can ensure these incentives reach beyond the capital and into the regional economies most in need of scale-up support.

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EIS investments fall sharply despite tax breaks, raising concerns over regional imbalance and complexity

Sports betting has grown rapidly in recent years, especially with the rise of online platforms. To attract new customers, sportsbooks often offer exciting bonuses such as deposit matches, free bets, and risk-free wagers.

While these offers seem like easy money, they usually come with conditions—most notably, rollover requirements.

Understanding rollover requirements is essential if you want to make the most of your bonuses without falling into a trap. In this guide, we’ll explain what rollover requirements are, how they work, and what you should know before accepting any sportsbook bonus.

What Are Rollover Requirements?

Rollover requirements refer to the number of times you must bet the bonus amount—or sometimes the bonus plus deposit—before you can withdraw any winnings. These conditions prevent players from claiming a bonus and cashing it out immediately without placing any real bets.

In simple terms, it’s how much action you need to generate before the money becomes yours.

A Quick Example

Let’s say you deposit $100 and receive a 100% match bonus with a 5x rollover. That means you need to wager $500 total (5 x $100) before you can withdraw any winnings related to that bonus.

If the rollover was 5x on the bonus + deposit, you would need to wager $1,000 (5 x $200).

Why Do Sportsbooks Use Rollover Requirements?

Bonuses are marketing tools. Sportsbooks offer them to encourage new users to join and place bets. Without rollover requirements, people could abuse the system by claiming bonuses and withdrawing without actually using the platform.

Rollover requirements help:

Protect sportsbooks from fraud
Ensure players engage with the platform
Encourage responsible and consistent betting

Although they protect the operator, they also challenge the bettor. That’s why it’s so important to read the terms and understand what you’re agreeing to.

How to Calculate Rollover Requirements

Every sportsbook explains its bonus terms a little differently, but the basic formula is usually straightforward.

The Formula

(Bonus or Bonus + Deposit) x Rollover Multiplier = Total Wagering Requirement

Example 1: Bonus Only

Deposit: $100
Bonus: $100
Rollover: 5x (bonus only)
Total wager required: 5 x $100 = $500

Example 2: Bonus + Deposit

Deposit: $100
Bonus: $100
Rollover: 5x (bonus + deposit)
Total wager required: 5 x $200 = $1,000

Always read the fine print to see whether the rollover applies to the bonus alone or to the combined amount.

Other Terms That Affect Rollover

While the rollover number is important, other conditions can make it easier or harder to complete.

Minimum Odds

Some sportsbooks only count bets toward the rollover if they meet a minimum odds requirement. For example, wagers must be at odds of -200 or higher. This prevents bettors from placing only safe, low-risk bets to fulfill the terms. This is a common practice among many online betting sites Australia offers, ensuring that promotions are used as intended.

Time Limits

Many bonuses come with expiration dates. You may have 7, 14, or 30 days to meet the rollover. If you don’t complete it in time, the bonus and any related winnings may be forfeited.

Game Restrictions

Certain bets or sports might not count toward the rollover. Some sportsbooks exclude live betting, prop bets, or specific events from the requirement.

Single vs. Multiple Bets

Some platforms require that all bets be placed individually, while others allow parlays or combination bets to count toward the total.

How to Complete Rollover Requirements Smartly

Meeting rollover requirements doesn’t have to be difficult if you plan carefully. Here are a few tips to make the process smoother.

1. Stick to Lower-Risk Bets

While you need to meet a minimum odds requirement, you don’t have to go for long shots. Focus on bets with reasonable odds, such as -110 or +100, to maintain a good balance between risk and reward.

2. Avoid Chasing Losses

It’s tempting to increase your bets to speed up the rollover, especially after a loss. However, this can lead to poor decisions and faster losses. Stick to your budget and strategy.

3. Track Your Progress

Keep a record of how much you’ve wagered toward the requirement. Some sportsbooks display your progress in your account, but it’s wise to track it yourself as well.

4. Read the Terms Carefully

Every bonus is different. Always review the terms and conditions, especially the rollover multiplier, time limits, and any restrictions. Knowing what to expect helps you avoid surprises later.

Are Rollover Requirements Worth It?

That depends on the player and the bonus. If you’re already planning to bet and the rollover is reasonable, a bonus can add extra value. However, if the rollover is too high or the restrictions are too tight, it may not be worth the effort.

Here’s what to consider:

Is the rollover multiplier low (3x–5x)? That’s a good sign.
Are the odds and time frame manageable?
Do you have the time and budget to meet the terms?

If the answer is yes, then the bonus can be a valuable boost to your bankroll.

Conclusion

Rollover requirements are a key part of most sports betting bonuses. They ensure that bonuses are used fairly and responsibly. While they may seem like a hurdle, they can be navigated with the right approach and a little planning.

Always choose bonuses with realistic rollover terms, understand the conditions, and stick to smart betting practices. That way, you can enjoy the rewards without falling into unnecessary risk.

When used wisely, sportsbook bonuses can enhance your betting experience—and rollover requirements are just part of the game.

Read more:
What Are Rollover Requirements? Sports Betting Bonuses Decoded

Burberry is set to cut up to 1,700 jobs — nearly 18% of its global workforce — as part of a sweeping cost-saving plan aimed at stabilising the business after a sharp downturn in the global luxury market pushed it into a pre-tax loss of £66 million.

The iconic British fashion house announced the measures on Wednesday, with the majority of cuts expected to come from head office functions, particularly in London, over the next two years. Additional reductions will come from operational changes at its Castleford factory in West Yorkshire, where the night shift will be scrapped and staff rotas reorganised.

The move is part of a cost-cutting strategy led by new chief executive Joshua Schulman, who joined in July with a mandate to turn the company around. The plan aims to deliver £60 million in new savings, bringing total annualised savings to £100 million by the end of 2027.

Despite the scale of the cuts, Schulman — a luxury industry veteran with past roles at Jimmy Choo and Coach — maintained a confident tone. “I’m more optimistic than ever that Burberry’s best days are ahead,” he said, though he acknowledged the increasingly uncertain macroeconomic environment, driven in part by geopolitical instability.

Investors appeared reassured, with shares in the FTSE 250 company rising 8.1% to 894p in morning trading.

For the financial year to 29 March, Burberry reported a 12% decline in like-for-like sales to £2.5 billion, alongside a sharp swing from a £383 million profit the year before to a £66 million loss. While the figures reflect the impact of broader industry pressures, they were not as severe as some analysts had feared.

The company has been hit hard by falling demand in China, one of its most important markets. Sales in mainland China dropped by 15% over the year, with an 8% fall in the fourth quarter alone. The global Chinese customer group also declined by a mid-single-digit percentage year-on-year.

Trade tensions have added to the headwinds. President Trump’s sweeping tariffs on luxury goods escalated the ongoing trade war with China, creating fresh uncertainty for brands reliant on global demand. A 90-day truce between the US and Beijing announced this week has offered a glimmer of hope that tensions may ease.

Schulman’s “Burberry Forward” strategy aims to refocus the brand on its most iconic products — including trench coats and scarves, which retail between £420 and £2,500 — while also broadening its pricing structure to appeal to a wider consumer base.

As the global luxury sector adjusts to a more cautious consumer landscape and rising political volatility, Burberry’s restructuring signals a tough but necessary repositioning. The brand now faces the challenge of reigniting growth while staying true to its British heritage — and doing so with a leaner, more focused workforce.

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Burberry to cut 1,700 jobs in global savings drive amid luxury slowdown

Fuel Ventures has led a £340,000 investment round into Community Wolf, a fast-growing South African startup using WhatsApp to revolutionise public safety through community-driven crime reporting and intelligence gathering.

The funding, which closed this month, marks a pivotal step in Community Wolf’s mission to use simple, accessible technology to make communities around the world safer — beginning with its home market of South Africa, where the platform has already gained significant traction.

By turning WhatsApp — the world’s most widely used messaging app — into a crime reporting and public safety tool, Community Wolf has created a powerful new communication channel between citizens, authorities, and the wider safety ecosystem. Its intelligent technology stack acts as a connective layer, allowing real-time responses and generating valuable, data-driven insights for law enforcement and local communities.

The new funding will be used to enhance the platform, build out Community Wolf’s in-house tech team, and scale operations in key global markets with high public safety needs, including Nigeria, Brazil, and other parts of South America. Marketing will also be ramped up across digital and out-of-home channels, aimed at establishing Community Wolf as a trusted and recognisable safety brand.

Mark Pearson, founder of Fuel Ventures, said the decision to invest was driven by the platform’s transformational potential: “We’re backing Community Wolf because they’re building something truly game-changing — a public safety network that puts the power in the hands of the people, using tools we already know and trust. The impact in South Africa is already clear. We’re proud to support their mission as they scale globally.”

Co-founders Nick Mills and Michael Houghton launched Community Wolf as a grassroots initiative to help people feel safer in their neighbourhoods. The platform’s effectiveness and community engagement have since propelled it into one of the most innovative players in public safety tech.

“This investment is a huge validation of our vision,” said Mills. “We’ve seen just how transformative it can be to connect communities using platforms they already use. Fuel Ventures’ backing gives us the rocket fuel to expand our reach and deepen our impact.”

Houghton added: “We’ve always aimed to stay lean so we can remain close to the communities we serve. But we also want Community Wolf to become a household name — something people can rely on and trust to keep them safe. With this investment, we can grow with care and stay true to what makes us different.”

As governments and private companies increasingly look to harness technology for public good, Community Wolf’s approach — blending everyday digital tools with real-time safety infrastructure — could become a model for citizen-led security in high-need regions around the world.

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Fuel Ventures backs Community Wolf with £340k to scale WhatsApp-based public safety platform

Jaguar Land Rover (JLR) has posted its highest annual profit in a decade, marking a strong year for the British carmaker despite lingering uncertainty over US trade tariffs.

The Tata Motors-owned firm reported pre-tax profits of £875 million for the final quarter of its financial year, taking annual profits to £2.5 billion — up from £2.2 billion the previous year.

The company’s total revenues for the year held steady at £29 billion, with retail sales volumes flat at 428,000 vehicles following a 5% dip in the final quarter. However, a rise in operating margins enabled JLR to wipe out its net debt, ending the financial year with a net cash position of £278 million.

Adrian Mardell, JLR’s chief executive, hailed the results as a milestone moment for Britain’s largest carmaker: “We are confident that the implications [of US tariffs] will be net net positive,” he said.

The company also confirmed that major progress is being made on its electrification strategy. Testing has begun on the electric vehicle production lines at its Solihull plant, where the much-anticipated Range Rover Electric is due to begin production next year.

JLR also revealed that its upcoming all-electric Jaguar — codenamed the Type 00 — remains in development, with the most ambitious production forecast now targeting late 2025. However, insiders suggest this could slip into 2027 depending on demand and market conditions.

In addition, the carmaker will revive its Freelander nameplate as a new electric model. The vehicle will be manufactured at JLR’s Chinese facility and could be exported to the UK as part of the brand’s global EV strategy.

The upbeat financials come despite JLR’s temporary halt on US exports earlier this year, as the company awaited clarity on President Trump’s proposed tariffs. While a 10% blanket tariff on British automotive exports now appears likely, the company confirmed it had already shipped stock to the US in anticipation of the change and does not expect the cap of 100,000 UK vehicles per year to impact its forecasts.

JLR typically exports between 75,000 and 85,000 vehicles annually from the UK to the US, suggesting it will remain within the cap. However, the company did acknowledge that the 25% tariff on EU-made vehicles — which will affect its Slovakia-built Defender — presents a challenge. The Defender accounts for over a quarter of JLR’s total sales, with 111,000 units sold annually.

Despite this, Mardell downplayed the likelihood of job cuts or immediate decisions around opening a US-based manufacturing facility, stating that the company is adopting a “wait-and-see approach” in response to evolving trade dynamics.

With nearly one-third of JLR’s business dependent on the US market, trade conditions remain an important factor for future planning. Nevertheless, Mardell remains optimistic, highlighting strong performance, a robust electrification pipeline, and a clean balance sheet as signs that JLR is well-positioned to compete in the evolving global automotive landscape.

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Jaguar Land Rover celebrates decade-high profits as EV plans gather pace

Vinted, the digital marketplace for second-hand fashion, has reported a dramatic surge in profits as demand for resale platforms continues to grow.

The Lithuanian-headquartered company posted a profit before tax of €95.4 million (£80.3 million) for 2024 — nearly triple its €33.4 million profit the year before.

The resale giant also saw revenue climb by 36% to €813.4 million, up from €596.3 million in 2023.

Originally known for its focus on affordable, pre-loved clothing, Vinted’s popularity has soared thanks to high-profile listings that range from Paul Mescal’s cardigans and Ferne McCann’s baby clothes to luxury items from Alexa Chung’s wardrobe.

The platform, which now operates in 23 markets with a particularly strong footprint across Europe, has grown well beyond its second-hand fashion roots. In 2024, Vinted expanded into consumer electronics, enabling users to buy and sell items such as headphones, speakers, fitness trackers and laptops. The company also reported strong growth in emerging segments such as luxury fashion.

Founded in Vilnius in 2008, Vinted became Lithuania’s first tech unicorn in 2019 and continues to scale rapidly. In October 2024, a secondary share sale valued the business at €5 billion. It now employs over 2,200 staff, the majority based at its Vilnius headquarters.

Chief executive Thomas Plantenga attributed the company’s record performance to delivering value to its growing user base. “This performance is the result of our hard work to deliver products that bring high value for members at the lowest possible cost,” he said.

Vinted has also made strategic investments in its operations and infrastructure. Its dedicated logistics platform, Vinted Go, is expanding its parcel locker and pick-up/drop-off network to streamline deliveries. Meanwhile, Vinted Pay — the platform’s in-house payments service — launched its first services in Lithuania, supporting secure transactions between sellers and buyers.

In another sign of the company’s growing ambition, Vinted announced the creation of a new investment arm, Vinted Ventures, which will focus on supporting technology start-ups operating in the circular economy and second-hand retail sectors.

With resale and recommerce continuing to gain ground — both for sustainability-conscious consumers and cost-savvy shoppers — Vinted believes there is significant market share still to capture.

“Given the potential size of the market, we know there’s a huge opportunity ahead,” said Plantenga. “We see our current position as a solid foundation to build this future on, and we’ll continue to learn and improve.”

As the second-hand economy matures and expands into new categories, Vinted is positioning itself not just as a platform for pre-loved fashion, but as a major force shaping the next generation of sustainable retail.

Read more:
Vinted triples profits to £80m as second-hand fashion boom fuels expansion

Microsoft is laying off approximately 6,000 employees worldwide — nearly 3% of its global workforce — in its largest round of job cuts since early 2023.

The move comes as the $3.3 trillion tech giant seeks to manage the growing financial pressure from its aggressive investment in artificial intelligence infrastructure, despite delivering strong quarterly results and robust growth in its cloud computing division, Azure.

The layoffs will affect staff across multiple areas of the business, including LinkedIn and Xbox, as the company undergoes what it described as “organisational changes necessary to best position the company for success in a dynamic marketplace.”

Microsoft last reported a global headcount of 228,000 full-time employees in June 2023, with around 55% based in the United States. The current round of job losses, although not officially quantified by the company, is expected to impact around 6,000 roles globally.

This marks the largest restructuring since Microsoft cut 10,000 positions — nearly 5% of its workforce — in early 2023, when the tech sector broadly pulled back after rapid hiring during the pandemic-era boom.

While Microsoft’s latest financial results exceeded market expectations — driven by strong performance in its Azure cloud division — the company has been grappling with narrowing margins. Microsoft Cloud’s profitability dipped to 69% in the quarter ending March, down from 72% a year earlier, a decline attributed to rising infrastructure costs linked to artificial intelligence deployments.

The company has earmarked a record $80 billion in capital expenditure for the current financial year, much of it directed at expanding data centres to support AI applications and address capacity bottlenecks.

Analysts say the job cuts reflect Microsoft’s attempt to tightly manage its bottom line during this investment-heavy period. Gil Luria, an analyst at DA Davidson, said: “We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures.”

Despite the job losses, Microsoft remains one of the most strategically important players in the global tech landscape. Under CEO Satya Nadella, the company has positioned itself at the forefront of AI, with significant investments in OpenAI, the maker of ChatGPT, and tight integration of generative AI tools across its software ecosystem.

Founded in 1975 by Bill Gates and Paul Allen, Microsoft has evolved into a cloud-first, AI-powered technology leader. But as competition intensifies and infrastructure costs soar, the company now faces the challenge of sustaining innovation while keeping margins under control — and it’s clear that managing workforce numbers is a key part of that balancing act.

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Microsoft to cut nearly 3% of global workforce amid AI investment pressures