Microsoft Announces Up to 10,000 Job Cuts

Microsoft CEO Satya Nadella has introduced as much as 10,000 job cuts, with notices going out to affected staff as early as at this time. In a memo circulated to workers and revealed on-line, Nadella outlined the financial circumstances which are forcing “onerous decisions” similar to this, however said that Microsoft will proceed to spend money on “strategic areas” for its future. The full variety of staff to be laid off signify lower than 5 p.c of Microsoft’s complete workforce, in line with Nadella. The layoffs had been anticipated, with rumours leaking earlier at this time. As per studies, Microsoft had 221,000 staff as of June 2022, with 99,000 of these exterior the US. Different massive tech corporations together with Twitter, Amazon and Meta have additionally laid off important numbers of staff not too long ago because of a world financial downturn.

Within the company-wide memo, Nadella cited decreased client spending because the COVID-19 pandemic has grow to be much less extreme, and the truth that many elements of the world are dealing with financial recession. The layoffs are essential to align price buildings with projected income, and Microsoft will proceed to rent new assets the place wanted. Whereas some affected staff will likely be notified instantly, the method is anticipated to be full solely by Q3 2023. 

Promising to deal with all staff “with dignity and respect”, and act transparently, Nadella dedicated to serving to these laid off when it comes to satisfactory discover intervals, profession transition providers, persevering with employment advantages, above-market severance pay, and inventory possibility vesting, in accordance with legal guidelines and laws in varied international locations. The price of severance in addition to consolidating leased workplace area is anticipated to be $1.2 billion this yr. It was not instantly clear how most of the affected staff are within the US and what number of work in different areas.

Even by way of this course of, Microsoft says it is going to proceed investing its cash and folks in key strategic areas for future development, that are prone to contain AI. The memo ends with Nadella thanking all Microsoft staff for his or her dedication and resilience, however features a warning that everybody should carry out higher for the corporate to thrive.