preCharge News TECH — Microsoft announced Tuesday that it will lay off 6,000 employees, representing about 3% of its global workforce, as it looks to streamline operations and adjust to a rapidly changing tech landscape. The cuts span all levels, teams, and geographies, marking the largest reduction since its 10,000 job cuts in 2023.

Why Microsoft is Trimming Its Workforce

Adjusting to a Dynamic Market

The layoffs come despite strong financial performance. Microsoft recently reported $25.8 billion in quarterly net income and issued an upbeat forecast in late April. However, the company is now prioritizing agility as it adapts to rapid changes in AI, cloud computing, and enterprise software.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC.

The cuts are not performance-based, the spokesperson clarified, but rather part of a broader effort to reduce layers of management and improve efficiency.

Impact on Microsoft’s Redmond Headquarters

Nearly 2,000 Jobs Cut in Washington State

Of the 6,000 global cuts, 1,985 roles were eliminated in Washington State, including 1,510 at its Redmond headquarters, according to state filings. The move mirrors recent tech industry trends, as companies aim to streamline operations amid uncertain economic conditions.

Amazon, another tech giant, announced similar layoffs in January, citing “unnecessary layers” in its organization.

The Broader Tech Layoff Trend

Pressure Mounts Across the Industry

Microsoft isn’t alone in cutting jobs. Last week, CrowdStrike, a major player in the cybersecurity market, laid off 5% of its workforce. These cuts come as the tech sector navigates slowing growth, rising costs, and the pressure to pivot toward artificial intelligence and cloud services.

CEO Satya Nadella’s Strategic Shift

Betting on AI and Cloud Growth

In January, Microsoft CEO Satya Nadella signaled a strategic pivot, telling analysts that the company would adjust sales execution and incentives to focus on next-generation technologies like AI and cloud computing.

“At a time of platform shifts, you want to lean into the new design wins, not just repeat past strategies,” Nadella said, emphasizing the need for innovation as tech transitions to an AI-driven future.

Market Reaction

Stock Performance Remains Resilient

Despite the layoffs, Microsoft shares ended Monday at $449.26, the highest closing price this year. This figure remains just shy of the company’s record high of $467.56, set last July, reflecting investor confidence in its long-term strategy.

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Associated Press, CNBC News, Fox News, and preCharge News contributed to this report.