Microsoft has announced around 1,000 staff layoffs following a period of slow growth at the company.
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While Microsoft declined to give an exact figure, a source confirmed the number to Axios earlier this week. The cuts took place across a number of departments, teams, and regions.
Revenue is expected to slow in the coming months due to reduced sales of its Windows licenses for PCs and the cuts are a safeguarding measure against the expectation of continued slow growth.
A spokesperson for Microsoft told Axios: “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly.
“We will continue to invest in our business and hire in key growth areas in the year ahead.”
In July, Microsoft also made cuts, amounting to less than 1% of its staff. With approximately 221,000 employees worldwide, according to Statistica, this is still a considerable number.
The company’s share price had declined around 22% by this point, it had missed its Q4 earnings targets and called for roughly 10% revenue growth in Q1, which is its lowest in over five years.
Amy Hood, Chief Financial Officer of Microsoft, spoke about some of the challenges Microsoft had faced at the end of the financial year: “First, FX. The U.S. dollar strengthened throughout the quarter, creating an additional headwind beyond what we shared mid-quarter.
“As a result, for the full quarter, revenue and EPS were negatively impacted by $595 million and $0.04 per share, beyond our expectations shared in April.
“Next, extended production setdowns in China that continued through May and a deteriorating PC market in June contributed to a negative Windows OEM revenue impact of more than $300 million.
“And finally, reductions in advertising spend impacted LinkedIn Marketing Solutions and search and news advertising revenue by more than $100 million.
“In our consumer business, despite those macro challenges, we drove another quarter of share gains for Windows in the PC market and for Edge in browsers.”
The company still succeeded in increasing its overall headcount compared to the previous year.
Furthermore, these lay-offs amount to less than 10% of the 11,000 new hires Microsoft announced it was onboarding this quarter.
Ultimately, a weaker economy and recession fears are at the heart of these job cuts and Microsoft is not alone. Other major tech companies, such as Netflix, Snap, and Coinbase have also reported lays offs, while Meta and Salesforce have both slowed their hiring. Meta is also planning budget cuts and layoffs are expected.
Microsoft recently held its annual Microsoft Ignite conference for IT professionals, which saw several Teams innovations, Azure updates, new automation and AI, developer platform improvements, and more.