Microsoft has confirmed significant job cuts as global economic uncertainty continues, with around 10,000 roles set to go at the tech giant
In an internal memo to employees, Microsoft CEO Satya Nadella cited a need to, “align our cost structure with our revenue and where we see customer demand.”
The company also revealed it will take a $1.2 billion charge in its second fiscal quarter when it releases its full financial results next week, with Nadella saying that the cost is, “related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.”
Nadella added that Microsoft is “allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas.”
“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.”
Microsoft currently employs around 220,000 worldwide, 6,000 of whom are based in the UK.
The news comes a week before Microsoft’s January 24 financial performance investor update.
Nadella said in October 2022 that the company remained, “focused on helping [its] customers do more with less, while investing in secular growth areas and managing [its] cost structure in a disciplined way”.
To anyone reading between the lines, it was clear that Redmond had future cutbacks and layoffs in mind, although any details of these potential happenings had not yet been discussed in any detail.
Elsewhere in the company, some workers who are able to remain at the company are set to get an unlimited holiday allowance, however for now at least, it’s limited to salaried, US workers only.
More broadly, Microsoft isn’t the only company facing the impacts of a tough economic climate. Already this year, Amazon has announced plans to lay off 18,000 of its staff, meanwhile Salesforce has announced a 10% reduction in headcount, with potentially more to follow.