Microsoft to lay off 10,000 employees ahead of posting slowest sales growth in years
Microsoft is reportedly preparing to conduct a new round of layoffs. This time, the scale is really big, as thousands of people could lose their jobs in the coming days.
Update: Microsoft officially confirmed the mass layoffs in a blog post on January 18. The company will reduce its workforce by 10,000 jobs through the third quarter of FY2023 ending March 31. It will also invest more in “areas of secular growth and long-term competitiveness” while cutting costs in some other areas.
“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” CEO Satya Nadella wrote. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”
According to Nadella, US-based employees will receive above-market severance pay, healthcare coverage for another six months, 60 days’ notice prior to termination, and other benefits.
The original article can be read below.
- Sky News broke the news on January 17, saying Microsoft plans to cut around 5% of its total headcount in the coming days.
- As of June 30, 2022, the company employed more than 220,000 people globally. So this means up to 11,000 workers could be laid off.
- According to Insider, Microsoft could cut recruiting staff by as much as one-third. Many in-house teams have already frozen hiring.
- A new round of layoffs will primarily affect people in a number of engineering divisions, Bloomberg reported on Tuesday.
- The official announcement could come before Microsoft reports its results for the second fiscal quarter on January 24. The company is expected to post a 2% year-over-year sales growth, the slowest revenue increase since fiscal 2017.
- According to one source familiar with the matter, Microsoft will announce layoffs on Wednesday (via The Verge).
The company’s CEO Satya Nadella recently told CNBC that even giants like Microsoft aren’t “immune to global changes.” He added that “the next two years are probably going to be the most challenging,” citing the effects of rapid growth during the pandemic and the real recession going on across different countries.
In October, Microsoft laid off just under 1,000 employees, including people in the gaming division. This time, the scale will definitely be significantly larger.
Last week, the company also announced unlimited time off for its US workers. The decision was criticized by industry experts and executives, with economist Corey Quinn calling it a “scam to not have to pay out unused PTO when you depart the company.”
Microsoft isn’t the only tech company to cut jobs. In November, Meta laid off more than 11,000 employees as a “last resort” to fight declining revenues. Earlier this month, Amazon also eliminated 18,000 roles. The list of other tech companies includes Oracle, Twitter, Snap, Tencent, an Unity. The latter announced a new round of layoffs yesterday, which affected 284 people.
