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Microsoft
(MSFT) It may announce thousands of job cuts on Wednesday, according to multiple news reports, likely to be the latest technology company to extract its workforce With the global economic slowdown.
Sky News reported, without naming sources, that the layoffs would affect approximately 5% of the company’s workforce. Microsoft employs 221,000 people worldwide, of which 122,000 are in the United States.
The software company plans to cut jobs in a number of engineering departments, according to the company bloombergAnd which cited a person familiar with the matter. the Wall Street Journal, citing a person familiar with the matter, said the layoffs may be announced as soon as Wednesday. Microsoft declined to comment on the reports.
Speaking at the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Microsoft CEO Satya Nadella said the company is not immune to global economic weakness.
“Nobody can defy gravity, and the attraction here is inflation-adjusted economic growth,” he told World Economic Forum founder Klaus Schwab in a live debate.
Many tech companies have made significant workforce cuts since the start of the year, as inflation weighs on consumer spending and rising interest rates squeeze financing. Demand for digital services has also waned during the pandemic as people return to their offline lives.
Nadella said there will be a “normalization” of demand after rapid growth during the pandemic, which requires the tech industry to be more efficient.
“We will have to do more with less,” he added.
Amazon
(AMZN) It announced it planned to lay off 18,000 people and Salesforce said it would lay off 10% of its staff. Facebook
(FB) Parent Meta also recently announced 11,000 job cuts, the largest in the company’s history. In October, Axios reported that Microsoft had laid off fewer than 1,000 employees across several divisions.
CTOs from Meta Mark Zuckerberg to Salesforce’s Marc Benioff blamed themselves for over-hiring early in the pandemic and misread how to quell a surge in demand for their products once Covid-19 restrictions eased.
While the overall job market remains tight, layoffs in the technology sector have escalated at an astonishing pace. A recent report from outsourcing firm Challenger, Gray & Christmas showed that tech layoffs rose 649% in 2022 over the previous year, compared to only a 13% increase in job cuts in the overall economy over the same period.
Microsoft will report its second quarter earnings on January 24th. The software company’s Azure cloud computing business drove revenue growth over the three months through September, as sales in its personal computing division fell slightly.
