Microsoft is cutting 167 jobs from its operations in Sandyford in Dublin, following a reorganisation of its Windows International division.
However the company's investment in a new engineering division will create 54 new positions, meaning a net loss of only 113 jobs.
The company also hopes that by finding new jobs for staff in Microsoft locations outside Ireland, the impact of today's decision could see as few as 55 people lose their jobs.
Staff may have to move to the Microsoft offices in Redmond, USA, in order to remain with the company.
A spokeswoman said that no Irish factors, such as higher labour costs, had provoked today's decision.
An advisory group has been set up by the company to help employees evaluate their career options with the company.
Microsoft employs about 1700 people at its European headquarters in Dublin.
