The American computer giant Microsoft announced on Wednesday, citing the economic situation and changing priorities of its customers, that it would lay off around 10,000 employees by the end of March and thus further stir up an industry that was already affected by several large social plans.
The company, which is thus cutting almost 5% of its workforce, is also planning to modify its IT equipment and reduce the number of jobs.
These austerity measures will weigh $1.2 billion on accounts for the phased second quarter, which the company is due to report on Jan. 24. Revenue is expected to rise just 2.7% over the year, a very low rate for the IT giant used to double-digit growth.
In a published letter to employees, Microsoft CEO Satya Nadella explains that “while customers have accelerated their IT spending during the pandemic, they are now trying to optimize it to “do more with less.”
Businesses around the world are also showing “caution” about recession risks as advances in artificial intelligence rock the sector, he says.
Microsoft initially resisted thanks to the momentum of remote computing (cloud), but companies have tended to limit their investments in recent months amid fears of a slowdown in economic activity.
Other big tech companies have announced job cuts in recent months, such as Amazon and Salesforce, which announced layoffs of around 18,000 and 8,000 employees respectively in early January.
Meta, the parent company of Facebook and Instagram, also launched a social plan in November affecting 11,000 posts.
Microsoft had already conducted two rounds of layoffs, one in July, which the company said affected less than 1% of the workforce. The second took place in October and targeted fewer than 1,000 people, according to news site Axios.
Microsoft, which currently employs 221,000 people worldwide according to its website, has hired 75,000 since 2019, Wedbush’s Dan Ives recalled in a note. In his eyes, these layoffs are not a “surprise”.
The group “will continue to invest strategically in cloud, mergers and acquisitions (Activision), innovation bets (ChatGPT) and continue to accelerate innovation while reducing non-strategic areas (hardware, etc.),” predicts the analyst.