Microsoft plans to lay off 10,000 employees as part of broader cost-cutting measures, the company said in a securities filing Wednesday, becoming the latest technology company to cut staff due to growing economic uncertainty, CNN wrote on the subject.
Ahead of the announcement of the cuts at the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Microsoft CEO Satya Nadella said the company is not immune to the weaker global economy.
“No one can defy gravity, and gravity here is inflation-adjusted economic growth.”
he told WEF founder Klaus Schwab during a livestreamed discussion.
In a memo to staff on Wednesday, Nadella also referred to the changing demand for digital services over the years as well as looming recession fears.
“We live in times of significant change, and as I meet with clients and partners, a few things are clear. First, just as we saw customers accelerate their spending on digital services during the pandemic, we are now seeing them optimise their spending on digital services to do more with less.”,
As of June 30, 2022, Microsoft had approximately 221,000 full-time employees globally, according to a filing with the U.S. Securities and Exchange Commission, with about 122,000 of those employees based in the U.S.
Although the overall job market remains tight, layoffs in the technology sector are increasing at a staggering rate. According to a recent report by outplacement firm Challenger, Gray & Christmas, layoffs in the tech sector increased 649% in 2022 compared to the previous year, while layoffs in the economy as a whole increased by just 13% over the same period.
Microsoft will announce its second-quarter earnings on January 24. The cloud computing software company’s Azure business drove revenue growth in the three months to September as sales in its PC division declined slightly.
Even as Microsoft makes significant cuts, Nadella said the company will continue to invest in “strategic areas for our future” and pointed to advances in artificial intelligence as the “next big wave” of computing.