Microsoft Feeds the Bleeding in Tech: Announces 10,000 Layoffs

Microsoft is adding to the technology rush and laying off 10,000 workers in response to macroeconomic conditions. “We will work to align our cost structure with our revenue and where we see customer demand,” the company’s CEO, Satya Nadella, said in an email to employees on Wednesday. The departure plan will affect 5% of the workforce globally.

The adjustment will take place during the first months of 2023 (Microsoft’s fiscal third quarter). In turn, it will be accompanied by more cuts, which the company has announced that it will make an impact An extraordinary adverse event valued at $1,200 million (1109 million euros) in its accounts for the second financial quarter to be announced on January 24.

Microsoft justifies these modifications with “the times of significant change we’re going through”. “Just as customers accelerated their digital spending during the pandemic, they are now optimizing it to do more with less,” Nadella said in the same letter, while clarifying that these adjustments in no way mean that hiring in the regions will stop. The main strategies.

“We will continue to invest for our future, which means that we allocate our capital and talent to areas of secular growth and the long-term competitiveness of the company, while eliminating others,” explained the company’s CEO.

The announcement coincides with a wave of layoffs being experienced by tech companies, which have doubled their workforces since the pandemic hit. On the same Wednesday, the e-commerce giant, Amazon, will notify the dismissal of 18 thousand workers (1% of its one and a half million employees), as it had already announced at the beginning of the month. The company has lost half of its market value over the past year.

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28,000 layoffs between the two, tens of thousands added recently. According to a layoffs monitoring portal, companies in the sector executed about 60,000 starts in the last two months of the year alone. During 2022, other giants such as Alphabet (Google and YouTube) or Meta (Facebook, Instagram and WhatsApp) are implementing exit plans.

Change course

Why is this layoff bleeding happening now? In addition to the impressive headcount increases companies have implemented that they don’t need now, they are also affected by the vulnerability that technology companies experience especially when the macroeconomic environment is not good.

Inflation and higher interest rates lead investors to turn to less volatile and more resilient securities in adverse environments. In addition to the organizational pursuit that has fallen on them in recent times. A series of terms anticipate 2023 with more personnel changes like the one Microsoft announced on Wednesday.

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