Needle drop happens every autumn to a greater or lesser extent.
Every fall I get a lot of inquiry about "dying" spruce trees and other conifers that were perfectly healthy and now are showing yellow needles inside the tree, sometimes lots of yellow needles. People are justifiably worried about this and don’t want their tree to die.
Here is good news -- your tree is not dying. This event, fall needle drop, happens every year to a greater or lesser extent. And it is never the branch tips, it is always the oldest needles inside the tree. Every June or so, conifers have their single growth flush, the new shoots, candles sometimes growing rapidly from the buds the tree grew last year. And every fall the oldest needles, some of them over 10 years old, fail and die.
There are several reasons for this. The needles have worked hard producing sugar, tree food, for many years and are worn out. Also they are the needles in the most shade, as light does not penetrate into the inside of the tree easily. Another factor that strongly influences the amount of needle drop is environmental stress, drought, or better said, the watering has been ignored.
It is possible to water conifers in such a way that that the annual stress in the fall is greatly reduced. Suburban tree owners need to have a watering plan throughout the year. There is not enough soil in modern neighborhoods or rain in this part of the world to have trees thrive on their own without the addition of extra water, regularly. I have written extensively about watering habits elsewhere. See the article simply called Watering.
Spruce, pines, firs, and larch are all susceptible to fall needle drop. The larch are a little tricky, being a deciduous conifer; all their needles will turn color and drop. But not to worry, new needles will cover the tree next June.