Microsoft to cut 11,000 jobs across departments, report
The lay-offs come at a time when Microsoft’s revenue is expected to decline
Microsoft is reportedly planning to eliminate thousands of roles across different departments as part of an effort to restructure its workforce.
The lay-offs are expected to affect employees in multiple divisions including customer and partner solutions, engineering, and consulting.
Sky News reports that Microsoft intends to eliminate 11,000 jobs, or around 5% of its workforce. The company is expected to announce extensive lay-offs in the coming days, according to the report.
Bloomberg reports, citing a source, that Microsoft has plans to lay off employees across a number of its technical divisions. According to a Bloomberg source, this wave of cuts will be far greater than those at Microsoft in the past year.
A report by Business Insider said Microsoft may reduce its hiring team by up to one-third.
The company is said to be "realigning business groups and roles" as the end of its fiscal year approaches. Microsoft is expected to release its second-quarter profits next week.
As of June last year, the company employed 221,000 full-time workers, including 122,000 in the US and 99,000 abroad, according to filings.
Microsoft is currently under pressure to sustain Azure's growth rates after many quarters of decline in the personal computer market affected Windows and device sales.
Microsoft's current market value is $1.78 trillion. The company warned of a downturn in its cloud computing business in October, acknowledging that key corporate clients were rethinking their investment in reaction to economic challenges.
"In a world facing increasing headwinds, digital technology is the ultimate tailwind," CEO Satya Nadella said in October.
"In this environment, we're focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way."
Microsoft has undergone a transformation under Nadella's leadership, but recently the strength of the dollar has hurt its profitability. It is also battling regulators to get clearance for a £56 billion acquisition of Activision Blizzard, the creator of Call of Duty.
Last month, Microsoft acquired a £1.5 billion stake in the company that owns the London Stock Exchange, as part of a long-term cloud computing collaboration. Over the course of the alliance, the software firm anticipates earning $5 billion in revenue.
The latest round of lay-offs at Microsoft could indicate that the tech sector may continue to slash jobs in coming months.
Tens of thousands of jobs have been lost across the global tech industry in the past months as a result of sluggish sales and growing concerns about a recession.
According to tracking website lay-offs.fyi, tech companies laid off more than 150,000 people in 2022.
Facebook-owner Meta said in November it would reduce its workforce by 13%. It made the announcement just after Twitter cut almost half its workforce, after its acquisition by multi-billionaire Elon Musk in October.
Amazon, Salesforce, Arm, Twilio and Oracle are among the other global tech firms to have announced job cuts and/or hiring freezes in the past six months.