Microsoft to lay off 10,000 workers in plan to ‘align revenue with cost’

Microsoft, an American multinational technology company, says it would lay off about 10,000 of its workforce, as it responds to “macroeconomic conditions and changing customer priorities.”

The cut represents 5 percent of the company’s total workforce.

In a statement on the firm’s website on Wednesday, Satya Nadella, chief executive officer (CEO), Microsoft, said the company seeks to strive to deliver results on an ongoing basis, while investing in long-term opportunities.

He said this would require the company to take “actions grounded in three priorities”.

The CEO added that in the process of taking these actions, 10,000 workforces would be affected all through till the end of the year.

“We will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of the year (FY23) third quarter (Q3),” Nadella said.

“This represents less than 5 percent of our total employee base, with some notifications happening today. It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas.

“We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.

“Second, we will continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas.

“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.

“As such, we are taking a $1.2 billion charge in second quarter (Q2) related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.

“We will treat our people with dignity and respect, and act transparently. These decisions are difficult but necessary. They are especially difficult because they impact people and people’s lives — our colleagues and friends.”

According to Nadella, affected workers will be fully supported, adding that a six-month benefit would be given to them.

“We are committed to ensuring all those whose roles are eliminated have our full support during these transitions. U.S.-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination, regardless of whether such notice is legally required,” he added.

“Benefits for employees outside the U.S. will align with the employment laws in each country.”

In recent times, international conglomerates like Amazon, and Goldman Sachs have resorted to job cuts to cope with global economic shocks.