Microsoft, an American multinational technology company, has announced that it will lay off approximately 10,000 employees in response to “macroeconomic conditions and changing customer priorities.”
The reduction represents 5% of the company’s total workforce.
Satya Nadella, CEO of Microsoft, stated on Wednesday that the company strives to deliver results on an ongoing basis while investing in long-term opportunities.
He stated that this would necessitate “actions grounded in three priorities” on the part of the company.
The CEO went on to say that as a result of these actions, 10,000 workers would be affected until the end of the year.
He said “We’re living through times of significant change, and as I meet with customers and partners, a few things are clear. First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”
Microsoft’s CEO also said, “We will align our cost structure with our revenue and where we see customer demand.
“Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of the year (FY23) third quarter (Q3),” Nadella said.
“This represents less than 5 percent of our total employee base, with some notifications happening today. 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.
“Second, 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.
“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.
“As such, we are taking a $1.2 billion charge in second quarter (Q2) related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.
“We will treat our people with dignity and respect, and act transparently. These decisions are difficult but necessary. They are especially difficult because they impact people and people’s lives — our colleagues and friends.”
Microsoft promises full support
“We are committed to ensuring all those whose roles are eliminated have our full support during these transitions.
“U.S.-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination, regardless of whether such notice is legally required.
“Benefits for employees outside the U.S. will align with the employment laws in each country.”
Microsoft calls for better performance
The CEO further said, “When I think about this moment in time, the start of 2023, it’s showtime – for our industry and for Microsoft. As a company, our success must be aligned to the world’s success.
“That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from.
“If we deliver on this, we will emerge stronger and thrive long into the future; it’s as simple as that.”
Microsoft has joined the likes of Amazon to announce staff reduction in 2023.