Microsoft to lay off 3% of workforce, CNBC reports

Microsoft is laying off 3% of its workforce, or roughly 7,000 employees, CNBC reported on Tuesday, as the technology giant looks to rein in costs while funneling billions of dollars into its ambitious bet on artificial intelligence.

The cuts will be across all levels and geographies, and are likely the largest since Microsoft laid off 10,000 employees in 2023, according to the report, which cited a company statement.

The company let a small number of employees go in January over performance-related issues, but the latest cuts are not related to that and are focused on trimming management layers, the report said.

Microsoft did not immediately respond to a Reuters request for comment. The company's stock was slightly lower in morning trading.

As artificial intelligence emerges as a major growth engine, Big Tech has been pouring money into the space while slashing costs elsewhere to safeguard profit margins.

Rival Google has also laid off hundreds of employees in the past year, as it looks to control costs and prioritize AI, media reports have said.

Microsoft's reported move comes weeks after the company 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.

The company had a total of 228,000 workers, with 126,000 employees in the United States at the end of June last year, according to its annual filing with the U.S. SEC.