Tech giant Microsoft said it is cutting 10,000 jobs, representing about 5% of its global workforce, in an effort to cut costs amid signs of an economic slowdown.
Microsoft CEO Satya Nadella announced the layoffs in a memo to staff Wednesday, which the company posted online. The job cuts will occur through the end of Microsoft’s third quarter of fiscal 2023, which ends in March. Some employees are being notified today that they’re losing their jobs, Nadella wrote.
In addition to the layoffs, Microsoft is taking other cost-cutting actions, including making “changes to our hardware portfolio” and will consolidate building leases “to create higher density across our workspaces,” the company said in an SEC filing. All together, Microsoft said the moves will result in a charge of $1.2 billion in December 2022 quarter, representing a 12 cent/share hit to diluted earnings.
While Microsoft saw customers accelerate their digital spend during the pandemic, according to Nadella, “we’re now seeing them optimize their digital spend to do more with less.” He added that the company is “seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”
Nadella wrote that while Microsoft is eliminating roles in some areas, “we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.”
More to come