Microsoft lays off about 3% of its workforce in what one executive calls a ’day with a lot of tears’

Microsoft began laying off about 6,000 workers Tuesday, nearly 3% of its entire workforce.

Microsoft began laying off about 6,000 workers Tuesday, nearly 3% of its entire workforce and its largest job cuts in more than two years as the company spends heavily on artificial intelligence.

Hard hit was the tech giant's home state of Washington, where Microsoft informed state officials it was cutting 1,985 workers tied to its Redmond headquarters, many of them in software engineering and product management roles.

Microsoft said the layoffs will be across all levels, teams and geographies but the cuts will focus on reducing the number of managers. Notices to employees began going out on Tuesday.

The mass 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.

“I think many people have this conception of layoffs as something that struggling companies have to do to save themselves, which is one reason for layoffs but it’s not the only reason,” said Daniel Zhao, lead economist at workplace reviews site Glassdoor. “Big tech companies have trimmed their workforces as they rearrange their strategies and pull back from the more aggressive hiring that they did during the early post-pandemic years.”

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 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.