Microsoft looks set for its biggest round of job cuts in five years to allow for the integration of Nokia Oyj's handset unit.
It has not yet been confirmed in what parts of the business the reductions will take place, but they could occur in the Nokia unit and parts of Microsoft that overlap with it, alongside engineering and marketing.
Since acquiring Nokia's handset business, the firm's staff numbers have reached 127,000, more than both Apple and Google. Bloomberg reports that this could result in the company's largest layoff since 2009.
The restructuring may end up even dwarfing those redundancies, when 5,800 jobs were cut, amounting to around 5 per cent of the then workforce.
Chief executive Satya Nadella circulated a memo to employees last week promising to "flatten the organization and develop leaner business processes," but did not refer to any job losses specifically.
Further information on the cuts and other financial issues is expected to arrive when Microsoft reports quarterly results on 22 July.
Peter Wootton, a spokesman for Redmond, Washington-based Microsoft, refused to comment on what could be the largest job cuts in the company's history.
Microsoft is the latest technology firm looking to reduce costs through job cuts. Hewlett-Packard recently announced staff reductions after the eleventh straight quarter of declining sales.