Big tech companies have been no stranger to mass layoffs. In the new year alone multiple companies have announced massive cuts to their workforce such as Amazon and Meta’s recent cuts to their workforce in the past months. It seems that Microsoft plans to follow in their shoes. Multiple sources say that the tech giant is allegedly planning to cut thousands of jobs in the next coming days.
While the number of layoffs have yet to be confirmed, Sky News reports that the tech giant is considering cutting around 5% of its approximate 221,000 workforce, which could mean around 11,000 layoffs. A source familiar with Microsoft told The Verge that the layoff announcements could be coming as early as Wednesday, ahead of its second-quarterly earnings meeting in the coming week.
Dan Romanoff, Morningstar analyst, told Reuters.”From a big picture perspective, another pending round of layoffs at Microsoft suggests the environment is not improving, and likely continues to worsen…”
Microsoft is also expecting cuts to its engineering divisions on Wednesday according to Bloomberg. It’s reported that those job cuts will be larger than Microsoft’s previous cuts to its workforce in July and October last year. Business Insider even reported that the tech giant could cut its recruiting staff by up to one-third. Still, there is yet to be official confirmation by Microsoft, with spokesperson telling Gizmodo that these alleged reports were “rumors.” These upcoming layoffs come after many companies in big tech face off the blows of the global economic slowdown caused by the pandemic job boom.
2023 is leading up to be a difficult year for tech companies in general, an opinion echoed by Satya Nadella, Microsoft’s CEO, in an interview with CNBC.
“The next two years are probably going to be the most challenging because, after all, we did have a lot of acceleration during the pandemic and there’s some amount of normalization of that demand and, on top of it, there is a real recession in large parts of the world,” said Nadella. “The combination of pull-forward and recession means we will have to adjust”
These alleged layoffs come at a trying time for Microsoft, amidst its ongoing battle to retain its acquisition of Activision Blizzard against many of the deal’s detractors.