In a memo sent to employees, Microsoft’s CEO called such decisions ‘difficult, but necessary’
Microsoft today issued a filing that detailed plans to lay off 10,000 employees as part of broader cost-cutting measures. Company CEO Satya Nadella discussed the job cuts at this year’s World Economic Forum (WEF) in Davos, Switzerland. “No one can defy gravity and gravity here is inflation-adjusted economic growth,” he told WEF founder Klaus Schwab.
In a memo sent to employees, Nadella called such decisions “difficult, but necessary,” and said the 10,000 jobs to be axed represent less than 5% of the company’s total workforce.
“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” he wrote in the memo. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”
In addition to the layoffs, which the filing indicated will be completed by the end of Q3, Microsoft is also making changes to its hardware portfolio and creating “higher density across [its] workspaces” through lease consolidation. Collectively, stated the filing, these changes will result in a charge of $1.2 billion in Q2 of the company’s 2023 fiscal year.
Microsoft is certainly not the only tech giant taking such drastic actions in response to ongoing economic challenges. Amazon has announced plan to layoff 18,000 employees, while Salesforce said it’s cutting 10% of its workforce and Facebook is enacting its most sweeping layoff plan in its history with 11,000 job cuts.
The same economic pressures are being seen in the telecom space. For instance, Vodafone, which has roughly 104,000 employees around the world, signaled its intentions to cut “several hundred” jobs after revealing disappointing profits in the first half of 2022. And T-Mobile US is reportedly cutting some of its staff as part of larger “organizational shifts.”
