Microsoft has announced a plan to reduce 3% of its workforce, which translates to approximately 6,840 job cuts. This decision follows a 10,000-strong reduction that took place in 2023 and additional layoffs in the previous year. The company is currently experiencing higher-than-expected profits, reporting $25.8 billion in the most recent quarter, indicating that these layoffs may be part of a strategy to streamline operations rather than a reflection of poor performance.

In related news, Microsoft previously reported that job cuts made earlier this year were based on performance evaluations. However, the upcoming layoffs will not be linked to individual performance metrics. The reduction is also intended to simplify management structures within the company.

The layoffs coincide with a challenging period for Microsoft’s gaming division, which saw significant staff reductions last year, including 2,600 employees from Xbox and its subsidiary Activision Blizzard.

Despite these reductions, Microsoft remains a financially strong and highly valued company, currently holding the title as the most valuable company in the world with a market capitalization exceeding $3.3 trillion.