By
Temitope Olatunji
April 18th, 2024
The technology sector in general is struggling now, and Microsoft has been waiting for quite a long before cutting its workforce. Other companies started to lay off their staff much earlier.
Tech giant Microsoft Corp (NASDAQ: MSFT) is set to lay off as many as 11,000 employees within its cost-cutting initiative amid a slowing global economy. The jobs cut will be mostly from human resources and engineering departments.
Microsoft Announces Its Intention to Lay Off Its Staff
As of June 30, 2022, Microsoft had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally. The latest cut means the company will lay off 5% of its workforce.
The decision to axe thousands of employees results from Microsoft’s inability to respond to a global economic slowdown. It has been experiencing challenging times, as its cloud platform Azure does not maintain the expected growth rates and its stock has seen a decline.
Microsoft CEO Satya Nadella commented:
“The next two years are probably going to be the most challenging. 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 some parts of the world.”
In October 2022, Microsoft also laid off under 1,000 employees across several divisions.
Series of Layoffs in the Tech Sector
The technology sector in general is struggling now, and Microsoft has been waiting for quite a long before cutting its workforce. Other companies started to lay off their staff much earlier. According to tracking site Layoffs.fyi, the tech industry as a whole, released over 150,000 workers in total throughout 2022.
In November 2022, Facebook-parent Meta Platforms Inc (NASDAQ: META) also announced 11,000 job cuts. Bitmex, Dapper Labs, Mythical Games, and Snap, have also announced varying degrees of layoffs.
Recently, we reported about the retailing giant Amazon.com Inc (NASDAQ: AMZN) reducing its corporate workforce by 6% and laying off no less than 18,000 employees. Amazon Chief Executive Andy Jassy explained the decision by the uncertain economy.
Another software company Salesforce Inc (NYSE: CRM) also revealed plans to cut 10% of its workforce, which is just under 8,000 people. The reason for the dismissal of employees has also been the challenging environment.
Wedbush analyst Dan Ives commented:
“Over the last few weeks, we have seen significant headcount cut reduction from stalwarts Salesforce and Amazon. Many of these companies were spending money like 1980’s Rock Stars and now need to reign in the expense controls ahead of softer macro-economic conditions.”
Among other latest layoffs announced are job cuts in Goldman Sachs Group, Inc (NYSE: GS) – 3,200 workers, or 6.5 percent of the firm’s 49,100 staff, Coinbase (NASDAQ: COIN) – 950 jobs, or 20% of its workforce, Twitter – a few cuts in the trust and safety team due to low volume growth.
More than 21,000 workers in US-based tech companies have lost their jobs so far in 2023. The massive layoffs came after tech companies hired and expanded aggressively during the COVID-19 pandemic. But as earnings weakened across the board amid fears of an impending recession in 2022, they started conducting widespread layoffs that have continued into 2023.