Microsoft Announces Plans for 10,000 Job Cuts Amid Economic Downturn

Microsoft announces job cuts amid macroeconomic slowdown and technological disruptions

Microsoft announced plans to lay off at least 10,000 employees amid a web of macroeconomic and technological changes. The five percent staff reduction translates to 1,200 million dollars of costs paid by the company in the second quarter of its fiscal year, the last of 2022.

Satya Nadella, Microsoft’s Chief Executive Officer, communicated in an open letter that companies have been wary of suggested recession risks while technology-driven businesses have also intensified the disruption in their sector. Microsoft has been fortunate to weather this economic conditions mainly due to the cloud computing sector.

The decision to reduce workspaces and computer equipment came about as customers had increased their IT expenses during the pandemic but are now trying to save costs and do more with less. Companies such as Amazon, Salesforce and Meta – Facebook and Instagram’s parent company – have all announced major job cuts of 18,000 and 8,000 people and 11,000 people respectively.

Microsoft had already laid off of close to 1% of its staff in July and 1,000 people as per the information from Axios in October. The current number of employees, worldwide stands at 221,000, with an additional 75,000 hired between 2019 and 2021. Analysts are not surprised by this decision as the company will “continue to invest strategically in the cloud and (continue to) bet on innovation” while cutting down non-essential areas.

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