Microsoft Announces Mass Layoffs To Cut Costs Amid Economic Headwinds

Microsoft Satya Nadella, CEO of the company, stated Wednesday morning that it would be closing. dismiss Some 10,000 employees will be working in the coming months to help reduce costs during a difficult time. economic climate.

The layoffs will impact approximately 5% of the software company’s overall workforce, which currently includes 122,000 domestic workers and 99,000 international employees. Microsoft confirmed the layoffs on a regulatory filing You can also find out more about a memo Nadella told staff members that the company would fight economic headwinds while still investing in new technology.

“This is the context in which we as a company must strive to deliver results on an ongoing basis, while investing in our long-term opportunity,” Nadella told employees. “We will align our cost structure with our revenue and where we see customer demand … It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas.”

Microsoft shares were flat during the opening hour of trading Wednesday morning, despite a 0.5% rise in the S&P 500 index and a 0.8% gain in the tech-heavy NASDAQ. The company’s stock price fell more than 20% over the past year against a 12% decline in the former index and a 22% drop in the latter.

Nadella said that the company would “continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas.” He noted that artificial intelligence was a form of intelligence. “the next major wave in computing” and said Microsoft is working to create platforms using the world’s most advanced models.

Microsoft saw a 14% drop in net income during the first quarter fiscal year 2023, despite revenues increasing 11%. earnings report.

“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” Nadella said. “In this environment, we’re focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way.”

Microsoft was among many companies that introduced layoffs or hiring freezes in the technology sector last year. According to a report, the sector saw more than 90,000. report CrunchBase, which covered both small and large ventures. established firms Amazon and Tesla. Some investors have voiced concern about technology companies’ rapid expansion of payrolls. They call for a reduction to the headcount to match. dismal market forecasts.

One month after Federal Trade Commission officials announced the layoffs, blocked Microsoft stopped Activision Blizzard, the video game developer, from buying it for $69 billion. The merger would have allowed the company to lower market competition through its subsidiary Xbox. Microsoft President Brad Smith contested the agency’s sentiments in a statement The firm claimed that it had already addressed antitrust concerns from regulators.

“We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers,” He made a comment. “While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.”