The cuts come “in response to macroeconomic conditions and changing customer priorities,” the company’s CEO Satya Nadella released in a statement to its employees.
Microsoft announced thousands of job cuts this week, becoming the latest tech company to pluck its workforce as the global economy slows. The software company confirmed Wednesday its reducing workforce by 10,000 people through the end of the third quarter of the 2023 fiscal year.
The cuts come “in response to macroeconomic conditions and changing customer priorities,” the company’s CEO Satya Nadella released in a statement to its employees.
Microsoft reported the layoffs would affect roughly 5% of its workforce, with some notifications happening as early as Wednesday.
“It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted,” Nadella wrote in the statement. “The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.”
According to Bloomberg, which cited a person familiar with the matter, Microsoft will cut jobs in a number of engineering divisions.
Microsoft tech company employs about 221,000 people around the world, including 122,000 in the United States, as of June 30, 2022.
Nadella also said the company will continue to invest in strategic areas for its future, “meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas.”
“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts,” he wrote.
“As such, we are taking a $1.2 billion charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces .We will treat our people with dignity and respect, and act transparently. These decisions are difficult, but necessary. ”
After a massive hiring spree in the first two years of the pandemic, industry giants like Amazon and Meta reversed course in 2022.
There were at least 154,000 layoffs from more than 1,000 tech companies last year, according to Layoffs.fyi, a website that has been tracking tech layoffs since March 2020.
The website’s tallies – which are likely an undercount – have continued at a fast clip in 2023, with more than 25,000 layoffs recorded so far this year. Layoffs.fyi data shows the U.S. tech companies that trimmed the most jobs last year include: Meta: 11,000; Amazon: 10,000; Cisco: 4,100; Carvana: 4,000; Twitter: 3,700
Lockdowns had a major effect on consumer spending. Experiences like travel or restaurants were largely off the table, so people began to shift their discretionary spending to products from tech companies like Amazon and Peloton.
Originally published at USA Today