Microsoft plans to put off hundreds of staff to scale back prices as the worldwide financial system slows, the corporate mentioned Wednesday.
The cuts will have an effect on 10,000 folks worldwide. In a blog post asserting the layoffs, Microsoft CEO Satya Nadella pointed to widespread fears of recession and a downturn in shopper demand, which have led to comparable cutbacks by different tech giants.
“As we saw customers accelerate their digital spend during the [COVID-19] pandemic, we’re now seeing them optimize their digital spend to do more with less,” he wrote. “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.”
Nadella mentioned the cuts will have an effect on “less than 5 percent of our total employee base” at Microsoft. As of June 30, the corporate had a full-time workforce of round 221,000.
Some staff are receiving layoff notifications Wednesday. But cuts are anticipated to proceed by way of the tip of March, possible hitting divisions akin to engineering and human assets, in keeping with media reports.
“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella mentioned.
The CEO added that his firm is “taking a $1.2 billion charge in Q2” — the second fiscal quarter, which led to December — “related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.”
Other tech firms seeing main cutbacks in latest months embrace Amazon, Facebook, Salesforce and Alphabet, Google’s father or mother firm.