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"Microsoft becomes the latest major US technology company to prepare to cut jobs at a time of growing economic uncertainty." Although Microsoft said it would increase its headcount in the future, it said it was "readjusting business teams and roles" after its last fiscal year ended June 30, with some employees' positions eliminated due to "corporate strategy changes," Yahoo Finance reported Tuesday. Microsoft shares fell more than 4 percent in the United States.

The layoffs will reportedly affect about 1 percent of Microsoft's 180,000 employees and involve teams including its customer and partner solutions group, as well as consulting. The move comes after Microsoft slowed hiring plans for several teams. "We did a small number of job eliminations. Like all companies, we regularly assess our business priorities and restructure accordingly." Microsoft said in an emailed statement.

Microsoft reported strong earnings for its latest quarter, with revenue up 26% from a year earlier and total revenue of $49.4 billion. But in early June, the company cut its revenue and earnings guidance for the next quarter, citing the impact of foreign exchange fluctuations.

In recent years, Microsoft has typically announced layoffs shortly after the July 4 holiday in the United States as it makes changes for the new fiscal year, Bloomberg said.

Layoffs in the US technology sector have accelerated in the past few months as investors have retreated from capital markets amid fears of a US recession. Startups, especially those in capital-intensive businesses like food delivery and fintech, are having to take the hit. Fast-delivery startup Gopuff told investors it is laying off 10% of its workforce, or about 1,500 employees, amid growing concerns about the economy.

Amid continuing bad signals on the economy, there appears to be a ripple effect of layoffs at The nation's tech giants. Yahoo Finance reported that Oracle is considering a $1 billion cost-cutting plan that will include thousands of layoffs. In addition to Microsoft and Oracle, Twitter last week cut a third of its recruiting team and cancelled a back-office contract at its Silicon Valley headquarters, leading to the loss of hundreds of outsourcing workers. Pichai, CEO of Alphabet, Google's parent company, said in an email that the company plans to slow hiring for the rest of the year.

Tesla laid off 229 employees in SAN Mateo, Calif., on Tuesday, filing a permanent closure of the SAN Mateo, Calif., facility where employees develop the Autopilot system. Tesla has laid off hundreds of employees in the past month. Tesla CEO Elon Musk has told executives he feels so bad about the economy that the company needs to cut 10% of its workforce.

Top executives at Facebook parent company Meta have reportedly asked managers to submit the names of "underperforming" people to the company's internal performance improvement plan, indicating that the company will lay off employees without formal layoffs. CEO Mark Zuckerberg thinks Meta is in "one of its worst downturns."

In the past few months, publicly traded US tech companies such as Nvidia, Lyft, Snap, Uber, Spotify, Intel and Salesforce have also slowed hiring or announced layoffs outright. Aggressive rate hikes by the Federal Reserve have increased the risk of a recession and reduced investor appetite for growth stocks. With Shares of Microsoft and Google both down more than 20% since the start of the year, the Wall Street Journal believes the shine has come off U.S. tech stocks.