Microsoft is planning to reduce its workforce for cost-cutting purposes amid growing economic uncertainty. According to a letter that Satya Nadella shared on the official Microsoft blog today, Microsoft is making changes that will result in the lay-off of 10,000 employees by FY23 Q3, a figure that would amount to 5% of the company’s total employee base. Microsoft will continue to hire in “key strategic areas,” however.
From Nadella’s letter to Microsoft employees:
[…] we will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today. 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. 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.
[…] we will continue to invest in strategic areas for our 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. 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.
Microsoft isn’t the only tech giant cutting jobs. Some of the others include Amazon, which has announced that it plans to lay off 18,000 people. Another is Salesforce, which is cutting 10% of its staff. Facebook parent Meta has also said that it will be making 11,000 job cuts, as noted in coverage by CNN.