(Bloomberg) – Microsoft Corp. plans to cut jobs at a number of engineering departments on Wednesday, according to a person familiar with the matter, joining the ranks of tech giants tapering as the industry braces for a prolonged slump in demand.
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The extent of the cuts has not been revealed, but the person who asked not to be named to discuss confidential matters said the cut will be significantly larger than other rounds at Microsoft over the past year. Those cuts affected less than 1% of the software giant’s more than 200,000 employees.
Microsoft last downsized its workforce in October and July, eliminating vacancies and suspending hiring in various groups. While tech peers like Amazon.com Inc., Meta Platforms Inc., and Salesforce Inc. have announced cuts in the thousands in recent months, Redmond, Wash.-based Microsoft has so far taken smaller steps to deal with a deteriorating global situation to cope economic prospects and the potential for a continued slowdown in demand for software and services.
A Microsoft representative declined to comment. The shares, which have fallen 23% over the past year, were little changed at $240.35 as of Tuesday’s close in New York. Sky News previously reported that the company plans to cut thousands of jobs, and Insider reported that Microsoft could cut its hiring by up to a third.
Microsoft is forecast to post fiscal second quarter revenue up 2% when it reports earnings on Jan. 24. That would be the slowest revenue increase since fiscal 2017. Since then, Microsoft’s cloud computing business has spurred a resumption of growth, but that business, too, has started to slow over the past year.
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Nevertheless, the company has waited longer than many other technology leaders before making significant staff cuts. Cloud rival Amazon is laying off more than 18,000 employees in the largest cutback in its history. Facebook parent Meta announced sweeping job cuts last fall, and struggling social network Twitter Inc. has shed about half its workforce. Cloud software maker Salesforce laid off about 10% of its employees earlier this month.
Read a running list of tech companies planning layoffs
(Updates with the stock’s closing price in the fourth paragraph. A previous version of this article corrected the fifth paragraph to reflect that the most recent period was the second quarter of the fiscal year and not the third of the fiscal year.)
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