Microsoft Dismisses 10,000 Workers, 5% of its Workforce
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Microsoft Dismisses 10,000 Workers, 5% of its Workforce

Microsoft has announced plans to lay off 10,000 employees. This was contained in a memo released by Microsoft today. Microsoft CEO, Satya Nadella in the memo released in an SEC filing, explained that some changes necessitated the reduction in the organization’s workforce. 

Hinting that some employees will receive dismissal notifications today, Microsoft CEO noted that the 10,000 layoffs should be completed by the end of the first quarter of 2023. Nadella also added that US employees, affected by the layoffs will receive “above-market severance pay.” The Microsoft boss also noted that they will enjoy healthcare coverage and continued vesting of stocks for six months.

The recent job cuts are not entirely new to Microsoft, who in 2014 cut down 18,000 positions. 

Microsoft’s Workforce

Currently, Microsoft has more than 220,000 employees. So the job cuts, although significant, affect just 5 percent of the workforce. Recall that in 2019, Microsoft hired roughly 75,000 employees. In a research note, Wedbush Securities analyst Dan Ives wrote “We are seeing the clock strike midnight for the tech sector after a decade of hyper-growth and now major layoffs are being seen at MSFT, Salesforce, Meta, Amazon, among many others across the Valley.” 

Nadella also noted that they “will continue to hire in key strategic areas.” Recall that some days earlier, the organization implemented a new unlimited time off policy for its workforce. The new policy will give employees that have unused vacation balance, a one-time payout in April.

Microsoft Q’2 fiscal earnings

According to the memo, the tech giant is taking a $1,2 billion charge in its Q2 earnings. This is closely related to severance costs, lease consolidation costs, and changes in the hardware portfolio. The company is due to announce its fiscal 2023 second-quarter earnings on January 25th, 2023. Reports suggest that the recent job cuts show some missed revenue targets in the organization’s business.

The CEO also maintained that “we as a company must strive to deliver results on an ongoing basis while investing in our long-term opportunity. I’m confident that Microsoft will emerge from this stronger and more competitive.” 

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