Microsoft (MSFT, Financials) is letting go of about 6,000 employees across divisions and regionsroughly 3% of its staffas it trims layers of management and resets for growth.

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The company confirmed the cuts Tuesday, including 1,985 roles in Washington state and 1,510 at its Redmond headquarters. These are Microsoft's largest layoffs since 2023, when it slashed 10,000 jobs.

Unlike the smaller round in January tied to performance reviews, the latest reductions are part of a broader shake-up to streamline operations.

Microsoft reported $25.8 billion in net income in its April earnings, beating estimates and offering a strong forecast. CEO Satya Nadella had already hinted at changes, noting the company needed to refocus sales efforts as Azure growth slowed in non-AI segments.

Tech peers are doing the same. CrowdStrike is cutting 5% of its workforce, and Amazon has made structural adjustments this year.

Microsoft stock ended Monday at $449.26, its highest close in 2025, and not far off its record of $467.56 from July 2024.

Investors will now watch how Microsoft reallocates toward AI and whether these cuts mark the endor just the startof a deeper transformation.

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This article first appeared on GuruFocus.

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