Microsoft began its largest mass layoff in years after its CFO said the company is ‘reducing layers with fewer managers’
Microsoft began laying off nearly 3% of its entire workforce Tuesday, its largest mass layoff in more than two years.
The tech giant didn’t disclose the total amount 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% of those workers were in the U.S.
Microsoft, based in Redmond, Washington, said the layoffs will be across all levels and geographies but the cuts will focus on reducing the number of managers. 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 their 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 U.S. 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 to the end of last year.
The layoffs are expected to hit across all parts of Microsoft’s business, including the career networking site LinkedIn and the video game platform Xbox.
The company didn’t give a specific reason for the layoffs, only that they were part of “organizational changes necessary to best position the company for success in a dynamic marketplace.”
Microsoft has said it has been spending $80 billion in the fiscal year that ends in June on building data centers and other infrastructure it needs to develop 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 CEO Satya Nadella told Meta CEO Mark Zuckerberg at an AI event last month at Meta’s headquarters that “maybe 20, 30% of the code” for some of Microsoft’s coding projects “are probably all written by software.”
This story was originally featured on Fortune.com