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Techspace - Microsoft's mass layoffs are the latest in a series. According to someone who is familiar with the matter, Microsoft Corp. plans to cut jobs in several engineering divisions on Wednesday, just days after vacating its US office with Meta, the tech giant. Microsoft joins the ranks of technology giants that are rising back as the industry prepares for a prolonged slump in demand.
The person who spoke on the condition of anonymity because they were discussing confidential matters stated that the reduction would be significantly more significant than any other round at Microsoft in the previous year. Less than one percent of the software giant's more than 200,000 employees were affected by those reductions.
However, the number of affected Redmond, United States employees is said to have reached 5% of the company's workforce. The Verge reports that more than ten thousand employees will be laid off, with a force of more than 220 thousand. Precisely, as many as 11,000 positions are being eliminated by Microsoft.
According to Reuters and Bloomberg reports, Microsoft layoffs are anticipated to affect the workforce in the engineering and HR departments. Regardless, it is essential to keep in mind that Microsoft has yet to officially confirm the number of employees who will receive pink slips.
Nearly 5% of the workforce may be laid off if the 11,000 jobs reported to be going away are true.
In addition to these reports, even UK-based SKY news reported that Microsoft layoffs could begin as soon as today and affect approximately 5% of the company's workforce.
However, Microsoft layoffs have been occurring for some time. The tech giant laid off around 1,000 employees across departments, even in October 2022, citing the global economic downturn as one of the primary reasons.
Other tech giants like Twitter and Facebook's parent company Meta were also laying off employees.
Sudden Layoffs Announcement
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In October and July, Microsoft reduced its workforce, closed open positions, and stopped hiring in various groups. Microsoft, based in Redmond, Washington, has been taking fewer steps to negotiate with a worsening global economic outlook and the potential for a slowdown in demand for software and services.
Microsoft is in contrast to technology counterparts such as Amazon.com Inc., Meta Platforms Inc., and Salesforce Inc., which have announced cuts totaling thousands throughout the past few months.
In these trying economic times, Microsoft is the tenth technology company to lay off employees. Interestingly, Microsoft made these layoffs just a few days after they made new rules that permit employees to grab as much time off as they want.
In the meantime, managers can grant leave without a time limit, and Microsoft employees who still have unused leave allowances will be reimbursed in cash in April.
Satya Nadella, CEO of Microsoft, once mentioned the difficult economic conditions the technology industry will face over the next two years. Nadella acknowledged that technology companies must improve efficiency and that even Microsoft is not immune to global changes.
"The next two years are likely the most difficult." In an interview with CNBC, Nadella stated, "We got a lot of acceleration during the pandemic, and there will be some normalization of that number of requests, and above all, there will be a true recession in some parts of the world."
When Microsoft reports earnings on January 24, it is anticipated that sales will increase by 2% in the fiscal third quarter. That would represent the sluggishest increase in revenue since fiscal 2017. Even Microsoft's cloud computing business has begun to slow down over the past year, despite the fact that it has fueled a resurgence in growth since then.
However, the company has taken longer than many other technology leaders to reduce its workforce significantly. Amazon, a cloud rival, is cutting more than 18,000 jobs, the biggest layoff in its history.
Meta, the parent company of Facebook, made extensive job cut public last fall, and Twitter Inc., the troubled social network, has cut about half of its workforce. About 10% of Salesforce's employees were laid off earlier this month.
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