Microsoft plans to lay off 10,000 employees as part of broader cost-cutting measures, the company disclosed in a securities filing, making it the latest tech company to reduce staff because of growing economic uncertainty.
Speaking before the layoff announcement at the World Economic Forum (WEF) in Davos, Switzerland, CNN quoted Microsoft CEO, Satya Nadella, to have said the company was not immune to a weaker global economy.
“No one can defy gravity and gravity here is inflation-adjusted economic growth,” he told WEF founder Klaus Schwab in a livestreamed discussion.In a memo to staffers Wednesday, Nadella also cited changing demand years for digital services years into the pandemic as well as looming recession fears.“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” he wrote. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less.”
Microsoft had approximately 221,000 full-time employees globally as of June 30, 2022, according to a US Securities and Exchange Commission filing, with some 122,000 of those staffers based in the United States.
Nadella said the job the cuts represented less than five per cent of the company’s total workforce and the reductions will be complete by the end of its fiscal third quarter this year, which ends in March.He said the company would incur a $1.2 billion charge in its second quarter related to, “severance costs, changes to our hardware portfolio, and the cost of lease consolidation.”