(DCWatchdog.com) – One of America’s tech giants, Microsoft, has announced it will lay off about 10,000 of its employees, or slightly below 5% of its total workforce, in another Big Tech company move to let go thousands of workers.
The past few months have seen multiple tech companies lay off tens of thousands of workers or announce upcoming layoffs, including Amazon, Google, and Salesforce.
The new Microsoft announcement has increased tenfold the number of employees it previously intended to let go. In July, the company announced it would lay off fewer than 1,000 workers, or under 1% of its workforce.
“I’m confident that Microsoft will emerge from this stronger and more competitive,” CEO Satya Nadella said in a memo to the company’s employees published on Microsoft’s website.
The Microsoft employees are expected to find out this week whether they will be dismissed, and the layoffs are set to be completed by March 31.
A company spokesperson explained that the layoffs would affect all Microsoft teams and geographies, but sales and marketing divisions would lose more workers than engineering, CNBC reported, as cited by Breitbart News.
In his memo, Nadella said Microsoft’s employees who would be laid off would get 60 days’ notices, above-market severance packages, and six months of health care and stock vesting.
The CEO declared that the tech giant had to optimize its staff due to the more challenging business climate in the past few months.
“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” Nadella wrote.
“We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” he added.
Earlier this month, the Microsoft CEO had warned that the company would have to make changes.
“I think for us as a global company, we’re not going to be immune from what’s happening in the macro,” he said in a CNBC-TV18 interview.
“We will have to also get our own sort of operational focus on making sure our expenses are in line with our revenue growth,” Nadella added.
Besides the layoffs, Microsoft announced it would take a $1.2 billion charge in the second quarter of the 2023 fiscal year over a lease consolidation and other activities. That will reduce earnings per share by 12 cents.
Gil Luria, a DA Davidson analyst, noted that Microsoft’s layoffs are no big surprise due to the worsening sales of its cloud infrastructure and Windows operating system.
He added that investors were growing very concerned about the margins of many tech companies, such as Microsoft.
The mass layoffs are expected to save Microsoft about $2.5 billion in the next 12 months, according to estimates by Evercore ISI.
On average, 1,600 tech workers have been laid off every single day in 2023 according to a recent report. https://t.co/SvVTQxtQFF
— Breitbart News (@BreitbartNews) January 18, 2023