The company’s latest worker reduction, its biggest in years, comes weeks after it reported upbeat earnings and guidance after AI investments. Microsoft is cutting less than 3% of its global workforce,

According to Microsoft, it’s all about reducing management layers and streamlining operations. The goal is to boost efficiency and cut costs which might also mean more reliance on artificial intelligence.

The technology company, headquartered in Washington, is cutting 122 workers in Silicon Valley. The layoffs heavily affected software engineering roles.