Microsoft will let go of 10,000 employees over the coming months, becoming the latest tech giant to significantly reduce its headcount. Working in this industry feels increasingly precarious every day.
The plan to cut thousands of employees was announced in a blog post on Wednesday(Opens in a new window), which was also shared with Microsoft’s employees. In it, CEO Satya Nadella noted the impact of decreased consumer spending after a boom during the pandemic, and a need to “deliver results on an ongoing basis, while investing in our long-term opportunity.”
“It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas,” said Nadella. These areas are likely to include artificial intelligence, with the CEO acknowledging surging interest and advancements in the technology. Rumours are also currently circulating that Microsoft is considering investing several billion dollars in OpenAI, the company behind popular artificial intelligence chatbot ChatGPT.
Even so, Microsoft’s future hiring plans will be cold comfort to current employees on the chopping block. Microsoft had approximately 221,000 full-time employees in the middle of 2022, with 122,000 in the U.S. and 99,000 internationally. The newly announced layoffs will reduce the company’s workforce by just under five percent.
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The one silver lining to this bad news is that Microsoft at least won’t be doing its massive cuts in one fell swoop, Twitter-style. The layoffs will begin from today and will continue through to March, hopefully giving employees time to make a plan in case they end up part of the unlucky five percent.
“These decisions are difficult, but necessary,” said Nadella. “They are especially difficult because they impact people and people’s lives – our colleagues and friends. We are committed to ensuring all those whose roles are eliminated have our full support during these transitions.”
In addition to 60 days’ notice prior to their untimely termination, cut employees who are eligible for U.S. benefits have been promised “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, [and] career transition services.” Employees outside the U.S. will get whatever their local laws entitle them to.
Large tech layoffs have become unfortunately common within the past year, with everyone from Amazon to Snap letting huge swaths of employees go. This isn’t even taking into account Twitter’s high-profile, Elon Musk-induced cuts, which saw the company quickly dismiss most of its 7,500 employees.
Microsoft itself reportedly laid off 1,000 people in October, though subsequently announced in September that it planned to increase the headcount in its Chinese division by the same number.