Microsoft announced Wednesday it will lay off 10,000 workers by the end of September, according to multiple reports.
The cuts amount to less than 5% of its workforce as the tech industry struggles with financial difficulties.
The move aims to "align our cost structure with our revenue and where we see customer demand," CEO Satya Nadella told employees in a memo.
While Microsoft will take a $1.2 billion hit in the second quarter related to "severance costs, changes to hardware portfolio, and cost of lease consolidation," Nadella said the company is allocating capital and talent to areas of "growth and long-term competitiveness" while divesting in other areas.
"These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts," wrote Nadella. "I’m confident that Microsoft will emerge from this stronger and more competitive."
Some employees will find out later this week if they have lost their positions with a 60-day notice, while those in the US that are eligible for benefits will receive severance and health care for six months, said Nadella.
This marks the second-biggest layoff in Microsoft's history after trimming 18,000 jobs in 2014 after acquiring Finnish telecommunication firm Nokia's mobile phone business.
Microsoft's total workforce stands at more than 220,000, after adding 40,000 workers in June to meet the high demand of corporate customers.