Tech giant Microsoft is to reduce the size of its global workforce by 3%, despite strong results in its latest quarter.
Microsoft employs around 230,000 people worldwide, meaning the reduction in headcount could affect about 6,000 roles, but the company has not specified numbers. More than half of its employees work in the US.
Microsoft said the redundancies will be across all levels and geographies, but will focus on reducing management levels. Notices to employees were sent yesterday.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” Microsoft said in a statement.
Microsoft last announced global job cuts on this scale in January 2023, alongside numerous tech companies at the time, when it outlined plans to lay off around 10,000 workers.
Tech companies have been investing significantly in AI recently. Gil Luria, head of technology research at DA Davidson Companies, said the job cuts showed Microsoft was “very closely” managing the pressure on its profit margins created by its increased 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 told Reuters.
Last month, Microsoft announced third quarter results, with revenues up 13% to $70.1bn, and net income up 18% to $25.8bn. It said the strong results were driven by its Cloud and AI activities.
Last week, cybersecurity software provider CrowdStrike outlined plans to cut 5% of its workforce.
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