News: Company blames cuts in handset and hardware divisions for the drop in female workforce.
In its latest diversity report, Microsoft said that the percentage of women working at the company has dropped from 29% to 26.8% in a year-on-year comparison.
However, the company claimed that the percentage of women in senior leadership teams is 27.2%, which according to Microsoft is the highest it has ever been.
The software maker also highlighted that 30.6% of all university hires were women, which is up from 27.7% last year.
Even the role of women in technical and engineering roles from universities across the world has come up to 26.1% from 23.7% in 2014.
Microsoft blamed the workforce reductions from its handsets and hardware divisions as a cause for the low number of women employees.
Microsoft Global Diversity & Inclusion general manager Gwen Houston said: "The workforce reductions resulting from the restructure of our phone hardware business (Sharpening Our Focus) impacted factory and production facilities outside the US that produce handsets and hardware, and a higher percentage of those jobs were held by women.
"This was the main cause of the decline in female representation at Microsoft. In short, a strategic business decision made in the longer-term interests of the company resulted in a reduction of jobs held by female employees outside the US."
Microsoft said that in the US the company year-over-year increases in nearly all racial and ethnic categories including African-American, Asian, Hispanic and Multi-Racial representation.