Microsoft on Wednesday said it would cut 10,000 jobs — nearly 5% of its workforce — by the end of the third quarter of fiscal 2023, becoming the latest global giant to fire employees en masse as companies brace for an economic downturn.
The layoffs will result in a charge of $1.2 billion in the second quarter of fiscal 2023, representing a negative impact of 12 cents on per-share profit, Microsoft said.
Microsoft Chief Executive Officer Satya Nadella said the technology industry must learn to be efficient as demand slows.
The layoffs represent “less than 5 per cent of our total employee base, with some notifications happening today,” Nadella said.
While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella said. He emphasized the importance of building a “new computer platform” using advances in artificial intelligence.
The news of layoffs, reported by media publications on Tuesday, follows some reductions last year.
While peers such as Amazon, Meta and Salesforce have announced cuts by the thousands in the past few months, Microsoft had so far taken smaller steps to try to reckon with the shaky global economic outlook and the potential for a protracted slowdown in demand for software and services.
Microsoft said in July last year that a small number of roles had been eliminated, while news site Axios in October reported that the company had laid off under 1,000 employees across several divisions.
The Satya Nadella-led firm is also grappling with a slump in the personal computer market after a pandemic boom fizzled out, leaving little demand for its Windows and accompanying software.
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