Microsoft will lay off 10,000 employees as part of cost-cutting measures, the company said in a securities filing this week.
The company became the latest tech giant to announce massive job losses, as growing economic uncertainty continues to loom over the industry.
Microsoft CEO Satya Nadella told an audience at the World Economic Forum in Davos the company was not immune to the global economic struggles. “No one can defy gravity and gravity here is inflation-adjusted economic growth,” he told WEF founder Klaus Schwab.
Facebook owner Meta, Amazon, Salesforce, and Twitter have all announced major job cuts in the past few months. For Microsoft, the story is the same as its peers—workforce expansions undertaken during a pandemic-related boom are being reversed as demand for services once popular during lockdowns now slows.
“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,” Nadella wrote in a blog post.
The layoffs will be carried out by the end of March and will cost the company $1.2 billion in the second quarter of the fiscal year, Microsoft said. Last year it was reported by Axios that Microsoft had laid off fewer than 1,000 employees across several divisions.
The company employs around 220,000 people across the world, with around 122,000 in the United States. The latest round of cuts represents less than 5% of its workforce. Nadella says the company will continue to invest in areas of potential growth despite the layoffs. Last week Microsoft was reported to be planning a $10 billion investment in the maker of the AI service ChatGPT.
Layoffs in the wider technology industry are gathering pace. A report from the outplacement firm Challenger, Gray & Christmas found that job losses in the sector were up 649% in 2022 compared to the previous year.