The cuts will be across all levels and geographies and are likely the largest since Microsoft laid off 10 000 employees in 2023. The company let a small number of staff go in January over performance-related issues, but the new cuts are not related to that, according to CNBC, which first reported the news.
Big Tech has been spending heavily on AI as they see the new technology as a major growth engine, while slashing costs elsewhere to safeguard profit margins. Google has also laid off hundreds of employees in the past year, as it looks to control costs and prioritise AI, media reports have said.
We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace, a Microsoft spokesman said via e-mail.
The company, which had 228 000 workers as of June last year, regularly uses layoffs to prioritise staffing in its main focus areas.
Tuesdays move comes weeks after Microsoft posted stronger-than-expected growth in its cloud computing business, Azure, and blowout results in the latest quarter, calming investor worries in an uncertain economy.