Microsoft laying off almost 3% of global workforce

Microsoft has started laying off nearly 3% of its entire workforce.

The tech giant did not disclose the total number of lost jobs but it will amount to about 6,000 people.

Microsoft employed 228,000 full-time workers as of last June, the last time it reported its annual headcount. About 55% were in the US.

Microsoft, based in Redmond, Washington state, said the layoffs will be across all levels and geographies but will focus on reducing the number of managers.

The layoffs are expected to hit across all parts of the business, including the career networking site LinkedIn and the video game platform Xbox.

Notices to employees began going out on Tuesday.

Microsoft announced a smaller round of performance-based layoffs in January, but the 3% cuts will be Microsoft’s biggest since early 2023 when the company cut 10,000 workers, almost 5% of its workforce, joining other tech companies that were scaling back pandemic-era expansions.

The latest layoffs come just weeks after Microsoft reported strong sales and profits that beat Wall Street expectations for the January-March quarter, which investors took as a dose of relief during a turbulent time for the tech sector and the US economy.

Microsoft’s chief financial officer Amy Hood said on an April earnings call that the company was focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers”.

She also said the headcount in March was 2% higher than a year earlier, and down slightly compared with the end of last year.

The company did not give a specific reason for the layoffs, only that they were part of “organisational changes necessary to best position the company for success in a dynamic marketplace”.

Microsoft has said it has been spending 80 billion dollars (£60 billion) in the fiscal year ending in June on building data centres and other infrastructure it needs to operate its artificial intelligence technology.

Those AI tools have been pitched as changing the way people work, including in Microsoft’s own workplaces.

Microsoft chief executive Satya Nadella told Meta boss Mark Zuckerberg at an AI event last month that “maybe 20, 30% of the code” for some of Microsoft’s coding projects “are probably all written by software”.