Microsoft announced on Tuesday that it would be laying off approximately 6,000 employees, representing 3% of its global workforce.
The cuts span across all teams, levels, and geographies as the company continues to adjust its structure to remain competitive in a constantly evolving market.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC.
Despite the layoffs, Microsoft reported better-than-expected results, with a quarterly net income of $25.8 billion and an optimistic forecast in late April.
As of June, the company employed 228,000 people worldwide, and the latest cuts will impact 1,985 jobs at its Redmond headquarters, including 1,510 office-based roles.
This is one of Microsoft’s largest rounds of layoffs since the company eliminated 10,000 positions last year. Unlike the performance-based layoffs in January, these new cuts are not linked to individual job performance, the spokesperson confirmed.
In line with broader industry trends, Microsoft is streamlining its operations by cutting unnecessary layers of management. Amazon made similar moves earlier this year, reducing roles to eliminate excess layers.
The restructuring comes as Microsoft continues to shift its focus. CEO Satya Nadella stated earlier this year that the company would be making changes in sales execution, after slower-than-expected growth in Azure cloud revenue, which wasn’t tied to artificial intelligence.
However, AI cloud growth has significantly outperformed internal projections, prompting Microsoft to rethink its strategy.
Microsoft’s stock recently hit its highest price of the year, closing at $449.26 on Monday, though it remains below its record high of $467.56 set last July.
As the company adapts to the rapidly changing business landscape, these layoffs are seen as a strategic move to position itself for future success.
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