Microsoft to sack 10,000 employees

Microsoft to sack 10,000 employees

The company is also taking a $1.2 billion charge.

The company is also taking a $1.2 billion charge. The company is also taking a $1.2 billion charge.

Windows maker Microsoft on Wednesday said that it’s letting go of 10,000 employees as it braces for slower revenue growth. The company is also taking a $1.2 billion charge.

In a letter to the employees and the U.S. SEC, Satya Nadella 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 FY23 Q3. This represents less than 5 percent of our total employee base."

He said that the company will make changes at the onset of an anticipated recession. "We saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less. We’re also 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".

He also addressed the $1.2 billion charge. "We are taking a $1.2B charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces."

Nadella also addressed the severance packages and other benefits for the laid-off employees. He said, "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."

This comes after Microsoft in July last year had claimed that only a small number of roles had been eliminated. However, news site Axios in October reported that the company had laid off under 1,000 employees across several divisions.

British TV news channel, Sky News was the first to report on Microsoft's plan to lay off 10,000 employees this morning.

This comes as major tech companies around the world are cutting costs to survive the incoming recession. Facebook parent company Meta Inc in a similar round of layoffs, sacked 11,000 jobs in November 2022. Another tech giant to lay off almost 50 per cent of its workforce was Twitter shorty after Elon Musk completed the $44 billion acquisition.

Published on: Jan 18, 2023, 7:57 PM IST
Posted by: Rachna Manojkumar Dhanrajani, Jan 18, 2023, 7:51 PM IST