Microsoft is planning to lay off approximately 3% of its workforce, marking its largest mass layoff in over two years.
The exact number of job cuts is expected to be around 6,000, with 1,985 of those job losses occurring in the company’s home state of Washington.
The big picture: As of June last year, Microsoft had 228,000 full-time employees, with approximately 55% of them based in the United States.
- The layoffs are anticipated to impact all levels and geographies of the company, with a focus on reducing the number of managers.
- This move follows a smaller round of performance-based layoffs announced in January and will be the largest reduction in workforce since early 2023 when the company cut 10,000 workers, almost 5% of its workforce.
Driving the news: The decision comes shortly after Microsoft reported strong sales and profits for the January-March quarter, exceeding Wall Street expectations and providing a sense of reassurance during a challenging period for the tech sector and the U.S. economy.
- Microsoft’s chief financial officer, Amy Hood, emphasized the company’s focus on building high-performing teams and increasing agility by reducing layers with fewer managers.
Go deeper: The layoffs are expected to impact all segments of Microsoft’s business, including its subsidiaries LinkedIn and Xbox.
- Despite not specifying the exact reasons for the layoffs, Microsoft indicated that they are part of organizational changes necessary to position the company for success in a dynamic marketplace.