Microsoft to lay off 10,000 workers as it seeks to cut costs

Microsoft plans to lay off 10,000 workers, the company said Wednesday, as it seeks to cut costs amid economic uncertainty and refocus on strategic priorities, such as artificial intelligence.

The company employed around 221,000 workers at the end of June, and the cuts represent less than 5% of its global workforce.

With the cuts, Microsoft becomes the latest tech giant to pull out after a few frantic years of hiring, when the pandemic-fueled surge in online services and the expansion of cloud computing created fierce competition for tech talent. .

“These are the kinds of tough choices we’ve made throughout our 47-year history to remain a consistent company in this industry that doesn’t forgive anyone who doesn’t adapt to platform changes,” said said Satya Nadella, chief executive of Microsoft, in a statement. message to staff.

The layoffs, which will begin Wednesday and continue through March, are the largest at the company in about eight years. Mr Nadella cut around 25,000 jobs during 2014 and 2015 as Microsoft scrapped its ill-fated acquisition of mobile phone maker Nokia.

Like other tech companies, Microsoft has grown rapidly during the pandemic, hiring more than 75,000 people since 2019. Microsoft’s annual revenue grew 58% over three years, but rising rates of interest and the prospect of a recession dampened the company’s outlook. In the quarter that ended in October, it announced its slowest growth in five years and warned that more tepid results could follow.

Customers are looking to “do more with less,” Nadella said. “We are also seeing organizations across all sectors and regions treading cautiously as some parts of the world are in recession and others are anticipating one.”

The changes, including severance and other restructuring expenses, will cost $1.2 billion, Nadella said. In a regulatory filing, Microsoft, which makes the Surface line of laptops and tablets, said some of the costs would come from “changes to our hardware portfolio,” as well as consolidating office leases. Microsoft is expected to release its quarterly results on Tuesday.

Nadella said the company would continue to hire in strategic areas and called advances in artificial intelligence “the next big wave in computing.”

The company has pursued several costly bets, including a potential additional $10 billion in its investment in OpenAI, which is making the artificial intelligence system ChatGPT hugely popular, and a $69 billion acquisition of video game maker Activision which is facing global challenges by antitrust regulators. .

Other tech giants have also cut costs after several years of skyrocketing expansion. Amazon began what is expected to be a huge round of layoffs on Wednesday, as part of its plans to cut its workforce by about 18,000 jobs.

Commerce software company Salesforce said this month it planned to lay off 10% of its workforce, or about 8,000 employees, and Meta, Facebook’s parent company, announced late last year that ‘it cut more than 11,000 jobs. .