Microsoft Reported to Announce Mass Layoff This Week

VIVA – Microsoft is reportedly to lay off around 10,000 employees, the company said on Wednesday, January 18, 2023, as it looks to trim costs amid economic uncertainty and to refocus on strategic priorities, such as artificial intelligence.

Speaking before the layoff announcement at the World Economic Forum (WEF) in Davos, Switzerland, Microsoft CEO Satya Nadella said that 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 live-streamed 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. First, as we saw customers accelerate their digital spending during the pandemic, we’re now seeing them optimize their digital spending to do more with less,” he wrote in a message to the employee.

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 cuts represent less than 5% 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, as quoted from the nytimes site.

The mass layoffs also come a week before Microsoft's planned quarterly earnings report that will give company investors more information about its financial performance. The tech giant's shares have fallen by a quarter in the past year. 

The layoffs also come after several tech giants, including Amazon cut more than 18,000 jobs earlier this month citing an uncertain economy.

Amazon's announcement comes after massive layoffs at other major tech companies including Twitter, Facebook parent company Meta and other Silicon Valley companies. Earlier this month, Salesforce and Vimeo also announced layoffs.