Microsoft Corporation is reportedly planning another round of job cuts across the company, with a sharper focus on addressing underperforming employees, according to a report by Business Insider. While the scale of the reductions remains unclear, a company spokesperson confirmed the plans, adding to a series of layoffs over the past two years.

The report also highlighted that many of the affected roles are likely to have been backfilled, indicating minimal changes to Microsoft's overall workforce size. As of June 2024, the tech giant employed roughly 228,000 people worldwide.

This development follows significant job cuts in previous years. In 2023, Microsoft laid off approximately 10,000 employees, followed by an additional 4,000 roles being cut in 2024. Several of these reductions targeted the company's gaming division, which has faced ongoing challenges despite the broader success of Microsoft’s cloud and productivity software businesses.

Microsoft’s move aligns with a broader pattern of job cuts in the technology sector. Many companies have been grappling with the economic fallout of high interest rates and a slowdown in investment since late 2022. Industry leaders, including Microsoft’s peers, have implemented cost-cutting measures to navigate these challenging market conditions.

However, the rise of artificial intelligence (AI) presents a potential counterbalance to these layoffs. Microsoft has invested heavily in its AI initiatives, including its multibillion-dollar partnership with OpenAI. The company is betting big on integrating AI across its product suite, which could drive growth despite an overall pullback in tech hiring.

The reported job cuts highlight Microsoft’s strategy to optimize its workforce while maintaining a focus on innovation. The adoption of stricter performance measures signals a growing emphasis on retaining and fostering high-performing talent.

By refining its approach to workforce management, Microsoft appears to be positioning itself to compete more effectively in the rapidly evolving tech landscape. This strategy aligns with its long-term commitment to growth areas like AI and cloud computing, even as traditional divisions face headwinds.

While the confirmed layoffs have garnered attention, the broader impact on Microsoft’s workforce and operations remains to be seen. The company has consistently emphasized its commitment to maintaining operational efficiency and innovation, which has helped it weather industry challenges in the past.

Microsoft has yet to respond to a mailed request for comment on the latest round of layoffs.