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Female portion of Microsoft's workforce shrinks again

The software giant plans to make meeting diversity goals a factor in whether executives receive their full annual bonus.

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Microsoft plans to tie executive bonuses to its goals regarding diversity after the tech giant reported, for the second consecutive year, a decline in the percentage of women working at the company.

Women made up 25.8 percent of Microsoft's global workforce at the end of September, a decline of 1 percent from the previous year, according to a company diversity report released Thursday. In 2014, women accounted for 29 percent of Microsoft's workforce.

Like most large tech companies, Microsoft continues to grapple with how to increase diversity in its workforce. Studies indicate that more-diverse teams, in terms of gender and race, show greater creativity and experimentation -- and get better results.

Microsoft's overall gender diversity puts it behind such tech rivals as Apple, Facebook and Google, all of which reported this year that women made up 30 percent or more of their workforces.

Microsoft blamed the continued decline on ongoing layoffs it began last year as part of the restructuring of the phone businesses the company acquired from Nokia in 2014. Many of the positions eliminated were manufacturing jobs at factories outside the US -- jobs that were held by a high percentage of women.

"While we are disappointed in the overall decline in the representation of women at the company, we know why it happened," Gwen Houston, Microsoft's general manager of global diversity and inclusion, wrote in the report. She went on to say that the company was encouraged by modest gains it made in the past year in the number of women it employs in technical and leadership roles.

Microsoft also reported progress in its hiring trends, saying women made up 27.7 percent of new hires this year, 2 percent higher than the company's current workforce.

Black and Latino employees also saw modest increases in the company's makeup. Blacks now compose 3.7 percent of the company's workforce, while Latino's make up 5.5 percent, increases of 0.2 percent and 0.1 percent, respectively.

Microsoft CEO Satya Nadella is expected to detail plans to make achieving diversity goals a factor in whether senior executives receive their full annual bonuses, Houston told Bloomberg News.