But plans for the cutbacks have not yet been firmed up and Microsoft could end up finding alternative methods to control costs, the Wall Street Journal reported, citing people familiar with the company's plans.
A Microsoft spokesman declined to comment on layoff rumours.
The number of potential job cuts is likely to be far less than the 15,000 positions that have been rumoured in recent weeks, the Journal reported.
It said Microsoft might announce the job cuts when it reports quarterly earnings next week.
The software company employs about 91,000 employees globally.