Microsoft is expected to cut 5% of its workforce — or 11,000 jobs — to cut costs due to slowing demand
- The tech giant will shed thousands of jobs in response to the global economic slowdown
- It follows in the footsteps of Amazon and Meta, which also announced job cuts
- Microsoft is poised to make an announcement within days if the stock rating falls
Microsoft will cut thousands of jobs, following in the footsteps of tech giants Amazon and Meta, which have also announced huge cuts in recent months.
The software giant, founded by billionaire Bill Gates, is reportedly laying off 5 percent of its 220,000 international workforce.
That means as many as 11,000 workers will lose their jobs – although insiders speculate the actual number could be higher.
On Tuesday, Microsoft shares traded at $240.16, down over 20 percent year-on-year.
Big tech companies are being forced to reduce their workforces in response to signs of a global economic slowdown, after many hired tens of thousands of additional workers during the pandemic.
Washington-headquartered Microsoft is expected to cut 11,000 as it becomes the latest tech giant to respond to the global economic slowdown
Microsoft’s share price plummeted last year when analyst firm Guggenheim downgraded its stock rating
Earlier this month, Amazon said it plans to cut 18,000 jobs — or 6 percent of its workforce — while Facebook owner Meta laid off about 11,000 jobs in November.
Meanwhile, software provider Salesforce is cutting 8,000 jobs and PC maker HP is cutting 6,000.
And Twitter owner Elon Musk has come under fire for firing thousands of employees without warning following his $44 billion acquisition of the social media giant last year.
Microsoft is now poised to make its own announcement within days, reports Sky News.
A separate report from Insider says the company could cut hiring by a third as many teams institute hiring freezes.
The company has a market value of $1.78 trillion and is scheduled to report its second-quarter earnings next week.
Of the 221,000 full-time employees, 122,000 worked in the United States as of June 30, the filings show.
Last July, the company announced it was cutting a small number of jobs but would replenish its workforce later in the year.
Microsoft Chairman and CEO Satya Nadella is expected to update investors on the company’s financial performance on January 24.
Any staff cuts should be confirmed by then.
The Microsoft chairman and chief executive, pictured, will update investors on January 24 on his financial performance, but job cuts are expected to be announced before then
An analyst told Sky News he expects the actual number of job losses to be even higher than predicted.
In October, Microsoft warned of a slowdown in its cloud computing business.
Nadella said at the time: “In a world with mounting headwinds, digital technology is the ultimate tailwind.
‘In this environment, we are focused on helping our clients do more with less while investing in sustainable growth areas and managing our cost structure in a disciplined manner.
It comes as Microsoft wages a regulatory battle to gain approval for its potential $68 billion acquisition of Activision Blizzard, the trademark of cult video game Call of Duty.
Last month, the company also acquired a $1.8 billion stake in the owner of the London Stock Exchange as part of a long-term cloud computing partnership.
Microsoft’s stock rating was downgraded by analysts at the Guggenheim ahead of next week’s earnings.
The firm wrote: “While most investors see Microsoft as a large, stable company that can weather any storm, it has vulnerabilities, some of which could be exacerbated by this macro[economic] slower.’
A Microsoft spokesman told the company had “not commented on the rumor”.