New York/London CNN —
Microsoft (MSFT) could announce thousands of job cuts Wednesday and potentially become the latest tech company to shed its workforce as the global economy slows, according to multiple news reports Wednesday.
Sky News reported, without citing sources, that the layoffs would affect about 5% of the company’s workforce. Microsoft employs 221,000 people worldwide, including 122,000 in the United States.
According to Bloomberg, the software company plans to cut jobs in a number of engineering departments. quoted by a person familiar with the matter. The Wall Street Journal, citing a person familiar with the matter, said the layoffs could be announced as early as Wednesday. Microsoft declined to comment on the reports.
Several tech companies have sharply reduced their workforce since the beginning of the year as inflation weighs on consumer spending and rising interest rates constrain funding. Demand for digital services during the pandemic has also eased as people return to their offline lives.
Amazon (AMZN) said it plans to lay off 18,000 employees and Salesforce said it will cut 10% of its workforce. Facebook (FB) parent Meta also recently announced 11,000 job cuts, the largest in the company’s history. In October, Axios reported that Microsoft had laid off fewer than 1,000 employees in several business units.
Tech CEOs, from Meta’s Mark Zuckerberg to Salesforce’s Marc Benioff, have blamed themselves for hiring too many people early in the pandemic and misjudging how an increase in demand for their products would cool once the restrictions of Covid-19 would be relaxed.
While the overall job market remains tight, layoffs in the tech sector have increased at a staggering rate. A recent report by outplacement firm Challenger, Gray & Christmas found that tech layoffs rose 649% year over year in 2022, while job losses across the economy as a whole increased just 13% over the same period.
Microsoft will report second quarter results on January 24th. The software company’s Azure cloud computing business drove revenue growth in the three months ended September as revenue at its personal computing unit declined slightly.