Microsoft will layoff 10,000 employees in order to reduce costs

Rumours of massive layoffs at Microsoft were true. The company stated this in a memo that Satya Nadella posted publicly. plans to cut Through its third quarter, which ended in March, 10,000 jobs were created. This move is intended to “align” [Microsoft’s] cost structure” with demand and revenue, according to Nadella — that is, to slash expenses as sales shrink. Nadella states that customers increased their digital spending at the peak of the pandemic. However, they are now scaling back. The executive states that many countries are in recession or expected to be in them.

Nadella said that Microsoft will continue hiring in “key strategic area” positions. The company will take on a $1.2B restructuring charge to cover severance costs and consolidating leases. Nadella states that US employees will be paid “above market” severance and continue to receive healthcare coverage for six more months. Stock awards will also be available.

As GeekWire explainsThis round is the second-largest in Microsoft’s history. The company made a drastic cut 18,000 jobs in 2014 Nadella was promoted and scaled down Nokia’s hardware division. Microsoft recruited 40,000 people in fiscal 2022, and hired aggressively during the pandemic. Some of these were acquired through buyouts such as speech tech heavyweight Nuance (6,500 employees) and AT&T’s former ad tech wing Xandr (1,500 people). While Microsoft’s current headcount is higher than before the pandemic started, it is showing a marked direction change.

The company isn’t the only one that is cutting jobs. Meta laid off more than 11,000 employees Last fall, Amazon placed a bet on pandemic-era growth. It didn’t work out. Amazon expects to drop over 18,000 jobs They were primarily located in the recruiting and retail divisions. Salesforce recently laid off 10 percent of its employees. Microsoft isn’t the only one facing tougher economic realities in tech.