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.
