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Microsoft lays off 10,000 employees as job cuts in tech sector spread

CEO Satya Nadella told employees the layoffs represent “less than 5 percent of our total employee base" and that while they are eliminating roles in some areas, Microsoft will continue to hire in "key strategic areas."

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Other tech companies have also been trimming jobs amid concerns about an economic slowdown.

Microsoft has cut 10,000 workers, almost 5 percent of its workforce, joining other tech companies that have scaled back their pandemic-era expansions.

The company said in a regulatory filing on Wednesday that the layoffs were a response to “macroeconomic conditions and changing customer priorities.”

The Redmond, Washington-based software giant said it will also be making changes to its hardware portfolio and consolidating its leased office locations.

Microsoft is cutting far fewer jobs than it had added during the Covid-19 pandemic as it responded to a boom in demand for its workplace software and cloud computing services with so many people working and studying from home.

The company's workforce expanded by about 36 percent in the two fiscal years following the emergence of the pandemic, growing from 163,000 workers at the end of June 2020, to 221,000 in June 2022.

Microsoft didn't immediately respond to questions about where the layoffs and office closures would be concentrated. As of June, it had 122,000 workers in the US and 99,000 elsewhere.

Cuts in tech sector

Other tech companies have also been trimming jobs amid concerns about an economic slowdown.

Amazon and business software maker Salesforce earlier this month announced major job cuts as they prune payrolls that rapidly expanded during the pandemic lockdown.

Amazon said that it will be cutting about 18,000 positions. It’s the largest set of layoffs in the Seattle company’s history, although just a fraction of its 1.5 million global workforce.

Facebook parent Meta is laying off 11,000 people, about 13 percent of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce.

CEO Satya Nadella made no direct mention of the layoffs on Wednesday when he put in an appearance at the World Economic Forum’s annual meeting happening this week in Davos, Switzerland.

When asked by the forum’s founder Klaus Schwab on what tech layoffs meant for the industry’s business model, Nadella said companies that boomed during the Covid-19 pandemic are now seeing “normalisation” of that demand.

“Quite frankly, we in the tech industry will also have to get efficient, right?” Nadella said. “It’s not about everyone else doing more with less. We will have to do more with less. So we will have to show our own productivity gains with our own sort of technology.”