Microsoft lays off 10,000 employees, about 5% of its workforce

Microsoft is cutting far fewer jobs than it created during the COVID-19 pandemic. (Photo: Canadian Press)

Microsoft is laying off 10,000 employees, or nearly 5% of its workforce, in emulation of other tech companies that have started to roll back some of the expansion made during the pandemic.

The company said in a regulatory filing Wednesday that the layoffs were in response to “macro conditions and changing customer priorities.”

Microsoft said it would also make changes to its hardware portfolio and consolidate leased desktops.

Microsoft is cutting far fewer jobs than it created during the COVID-19 pandemic as it responded to a surge in demand for its business software and cloud services as huge numbers of people worked or studied from home.

Microsoft’s workforce has grown approximately 36% in the two fiscal years since COVID-19 emerged, from 163,000 employees at the end of June 2020 to 221,000 in June 2022.

The layoffs are “less than 5% of our total workforce and some notifications are happening today,” CEO Satya Nadella said in an email to employees.

“As we eliminate roles in certain areas, we will continue to hire in key strategic areas,” said Satya Nadella. He stressed the importance of creating a “new computing platform” using advances in artificial intelligence.

He added that customers who accelerated their digital spending during the pandemic are now trying to “optimize their digital spending to do more with less.”

“We are also seeing organizations across all sectors and regions act cautiously as some parts of the world are in recession and others anticipate one,” Satya Nadella wrote.

Other tech companies have also cut jobs due to fears of an economic downturn.

Online retail giant Amazon and enterprise software maker Salesforce announced major cuts earlier this month as they slashed their payrolls, which had grown rapidly during the pandemic lockdown.

Amazon said it would cut about 18,000 positions. This is the largest wave of layoffs in the history of the Seattle company, despite the fact that it represents only a small part of its 1.5 million employees worldwide.

Facebook’s parent company, Meta, is laying off 11,000 people, or about 13% of its workforce. Elon Musk, the new CEO of Twitter, has downsized the microblogging site.

Microsoft did not immediately respond to questions about the concentration of layoffs and office closures. In June it had 122,000 workers in the US and 99,000 elsewhere.

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