Microsoft to cut 5% of workforce affecting thousands of employees: Report
Microsoft is set to lay off thousands of employees today. Citing Sky News, Reuters reports that thousands of roles will be cut, with the software giant looking to cut about 5% of its workforce or about 11,000 roles.
Thousands of job cuts in human resources and engineering are expected on Wednesday. The layoffs will be the latest in the US tech sector, where companies include Amazon and meta announced cuts to deal with slowing demand and a deteriorating global economic outlook.
The company had 221,000 full-time employees, including 122,000 in the US and 99,000 internationally, as of June 30, according to the filing.
Microsoft is under pressure to maintain growth at its cloud unit greenafter several quarters of recession in the personal computer market Windows and equipment sales, Reuters reported.
It said last July that a handful of roles had been removed. In October, news site Axios reported that Microsoft had laid off less than 1,000 employees in some divisions.
Shares of Microsoft, scheduled to report quarterly results on January 24, were slightly higher in late afternoon trading, Reuters reported.
Microsoft’s move could indicate that the tech sector could continue to lose jobs. Microsoft is the latest major tech company to face a challenging economy, and the job cuts will come just days after Microsoft implemented a new unlimited time off policy. Microsoft employees with unused vacation balances will receive a one-time payment in April, and managers will be able to approve unlimited “Discretionary Time.”
The cuts also come just weeks after the CEO of Microsoft Satya Nadella warns of two challenging years ahead for the tech industry. In an interview with CNBC, Nadella admitted Microsoft is not “immune to global changes” and spoke of the need for tech companies to be efficient.
“The next two years are probably going to be the biggest test,” said Nadella. “We’ve sped up a lot during the pandemic, and that demand has normalized to some extent. And on top of that, there’s been a real recession in some parts of the world.”