NewsUC&C18 Jan 2023 · 3 min read

Microsoft to Axe Another 10,000 Staff in 'Challenging Time'

Microsoft has announced today it will axe 10,000 more jobs by the third quarter of the fiscal year 2023.

Jonny Wills

Microsoft has announced today it will axe 10,000 more jobs by the third quarter of the fiscal year 2023.

Satya Nadella, Chairman and CEO of Microsoft stated in a corporate post on the Official Microsoft Blog:

"We are making changes that will reduce our overall workforce by 10,000 jobs through the end of FY23 Q3.

"This represents less than 5 per cent of our total employee base, with some notifications happening today."

Nadella stressed that Microsoft is still planning to hire in areas it considers to be high-growth.

He added: "It’s important to note that while we are 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."

In the statement shared with the tech firm's employees Nadella outlined a plan of strategy and prudence and said: "We will 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."

Nadella said that Microsoft will take a $1.2bn in Q2 related to redundancies, changes in its hardware portfolio and “cost of lease consolidation” – the latter of which will see it create “higher density” across its office space.

The low-key post pointed that Microsoft will be taking a redundancy cost hit north of $1 billion. He stated: "These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts."

Those affected by redundancy will receive above-market redundancy as well as six-months extra healthcare cover, he added.

“I want to extend my deepest thanks and gratitude to everyone who has contributed to Microsoft up to this point and to all of you who will continue to contribute as we chart our path ahead. Thank you for the focus, dedication, and resilience you demonstrate for Microsoft and our customers and partners each day,” he concluded.

Back in October, Microsoft cut 1,000 jobs due to ‘structural changes’, according to Office Today.

Spate of Redundancies Across the Tech Industry

Microsoft's 10K job cuts plan adds to a swathe of redundancies across the tech industry where the phrase "restructuring plans" has been used to describe the majority of layoff announcements.

According to Layoffs, technology companies laid off more than 150,000 workers globally in 2022. Avaya anticipated losing $26 million in September 2022 as it planned to save up to $250 million with job cuts of about 2,500. The company had already forewarned in July that it would have to make these cuts.

Around 3,750 Twitter employees received layoff notices in 2022, whereas 1,300 Snap (Snapchat) employees were let go.

In its first round of mass layoffs, Meta eliminated 11,000 positions in November or about 13% of its 87,000 employees. Facebook, Instagram, and WhatsApp were primary sources of these job losses.

As layoffs surpass the 10,000 announced in November, the ubiquitous Amazon fired another 8,000 employees at the start of 2023. The losses are a result of a decline in online shopping trends and efforts to stop over-hiring. According to reports, Amazon may have overextended itself. As the online retail giant loses $1 trillion in value, some investors predict Jeff Bezos will take over as CEO of the company once more.

Salesforce also announced that it would let goof just under 8,000 employees in a New Year's slowdown. "The environment remains challenging, and our customers are taking a more measured approach to purchasing decisions," co-founder Mark Benioff acknowledged. "With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 per cent, mostly over the coming weeks,” he added.