By Aditya Soni

May 13 (Reuters) - Microsoft ( MSFT ) said on Tuesday it

was laying off less than 3% of its workforce, or around 6,000

employees, as the technology giant looks to rein in costs while

funneling billions of dollars into its ambitious bet on

artificial intelligence.

The cuts will be across all levels and geographies and are

likely the largest since Microsoft ( MSFT ) laid off 10,000 employees in

2023. The company let a small number of staff go in January over

performance-related issues, but the new cuts are not related to

that, according to CNBC, which first reported the news.

Big Tech has been spending heavily on AI as they see the new

technology as a major growth engine, while slashing costs

elsewhere to safeguard profit margins. Google has also laid off

hundreds of employees in the past year, as it looks to control

costs and prioritize AI, media reports have said.

"We continue to implement organizational changes necessary

to best position the company for success in a dynamic

marketplace," a Microsoft ( MSFT ) spokesperson said on mail.

The company, which had 228,000 workers as of June last year,

regularly uses layoffs to prioritize staffing in its main focus

areas.

Tuesday's move comes weeks after Microsoft ( MSFT ) posted

stronger-than-expected growth in its cloud-computing business

Azure and blowout results in the latest quarter, calming

investor worries in an uncertain economy.

But the cost of scaling its AI infrastructure has weighed on

profitability, with Microsoft Cloud margins narrowing to 69% in

the March quarter from 72% a year ago.

Microsoft ( MSFT ) has earmarked $80 billion in capital spending this

fiscal year, with most of it aimed at expanding data centers to

ease capacity bottlenecks for artificial intelligence services.

D.A. Davidson analyst Gil Luria said the layoffs showed

Microsoft ( MSFT ) was "very closely" managing the margin pressure

created by its heightened AI investments.

"We believe that every year Microsoft ( MSFT ) invests at the current

levels, it would need to reduce headcount by at least 10,000 in

order to make up for the higher depreciation levels due to their

capital expenditures," he said.

(Reporting by Aditya Soni and Akash Sriram in Bengaluru;

Editing by Shinjini Ganguli, Anil D'Silva and Devika Syamnath)