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Most of the job cuts will be in the phone hardware business, underscoring the company's shift from hardware to its core software business.
Microsoft was widely expected to write off all or part of the $7.2 billion it paid for Nokia's handset unit, a deal that left the company with a money-losing business and only 3 percent of the smartphone market.
Microsoft's shares rose about 1 percent in early trading.
The latest round of job cuts is on top of the 18,000 job cuts the company announced last year.
Microsoft, which had more than 118,000 employees worldwide as of March 31, said it would take a restructuring charge of about $750-$850 million.
The company said it would record the charge in the fourth quarter.
(Reporting by Devika Krishna Kumar in Bengaluru; Editing by Saumyadeb Chakrabarty)