Microsoft is laying off almost 3% of its workforce across all levels, teams and geographies in a move that will impact around 6,000 people.
At the end of June last year, Microsoft had 228,000 employees worldwide. Recently, Washington state said it reduced its headcount tied to its Redmond headquarters by 1,985, including 1,510 in the office.
This is likely the largest round of layoffs since the elimination of 10,000 roles in January 2023.
This comes after a smaller round of performance-based layoffs was announced in January. However, according to a spokesperson, these new layoffs are not performance-based.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC.
The spokesperson said the company aims to reduce layers of management, following suit with Amazon, which got rid of employees after noticing “unnecessary layers” in January.
The software provider CrowdStrike also said it would lay off 5% of its workforce last week.
D.A. Davidson analyst Gil Luri said Microsoft’s layoff was likely impacted by their heightened AI investments.
"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," he said.
This comes after the tech giant reported better-than-expected quarterly results, with US$25.8 billion in net income and an upbeat forecast in late April.
