Microsoft to Cut 10000 Jobs by End of March – Microsoft is laying off 10,000 employees due to changes in digital spending habits and the weak global economy. They are joining other American companies like Facebook, Amazon, and Salesforce in making significant job cuts. Microsoft’s chief executive, Satya Nadella, said in a blogpost that customers had increased their digital spend when coronavirus hit in 2020-21 but were now scaling back.
“We’re now seeing them optimise their digital spend to do more with less,” he said. Nadella added that organisations in every industry and region worldwide were showing caution “as some parts of the world are in a recession and other parts are anticipating one.” Nadella also pointed to artificial intelligence creating the “next major wave of computing” as an example of the changes the company is facing. Microsoft is an investor in OpenAI, the company behind the ChatGPT chatbot.
“We will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs.” Microsoft employs about 220,000 people worldwide. The layoffs, to be carried out by the end of March, will result in a charge of $1.2bn in the second quarter of its fiscal year, Microsoft said.
It follows some reductions last year. Microsoft said last July that a small number of roles had been eliminated, and in October the news site Axios reported that the company had laid off fewer than 1,000 employees across several divisions. Microsoft is grappling with a slump in the personal computer market after a pandemic boom fizzled out, leaving little demand for its Windows and accompanying software. Slowing demand has also hit Microsoft’s cloud computing business, which has become a big part of its operations. The company also owns the Xbox gaming platform.
One analyst said Microsoft and other US tech majors are fighting a “Category 5 near-term economic storm.” Dan Ives, analyst at US financial services firm Wedbush Securities, said: “We are seeing the clock strike midnight for the tech sector after a decade of hyper growth and now major layoffs are being seen at MSFT, Salesforce, Meta, Amazon, among many others across Silicon Valley. This is a rip the Band-Aid off moment to preserve margins and cut costs.”
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