Microsoft prepares to announce big layoffs, according to reports

() — Microsoft could announce thousands of job cuts as early as Wednesday, according to multiple media reports, making it the latest technology company to cut its workforce as the global economy slows.

Sky News, without naming sources, reported that the layoffs would affect roughly 5% of the company’s workforce. Microsoft employs 221,000 people worldwide, including 122,000 in the United States.

The software company plans to cut jobs in several engineering divisions, according to Bloombergwho cited a person familiar with the matter. The Wall Street Journal, also citing a person familiar with the matter, said the layoffs could be announced on Wednesday. Microsoft declined to comment on the reports.

Multiple tech companies have made deep cuts to their workforce since the start of the year as inflation weighs on consumer spending and rising interest rates squeeze funding. Demand for digital services during the pandemic has also declined as people return to their lives offline.

Amazon announced that it plans to lay off 18,000 people and Salesforce said it will cut 10% of its staff. Facebook parent Meta also recently announced cutting 11,000 jobs, the biggest in the company’s history. In October, Axios reported that Microsoft had laid off fewer than 1,000 employees in various divisions.

Technology CEOs, from Meta’s Mark Zuckerberg to Salesforce’s Marc Benioff, have blamed themselves for overhiring early in the pandemic and misinterpreting how a surge in demand for their products would cool once prices eased. covid-19 restrictions.

While the overall job market remains tight, layoffs in the tech sector have increased at a staggering rate. A recent report from relocation firm Challenger, Gray & Christmas found that layoffs in the sector are up 649% in 2022 compared to the previous year. This compared to a rise of just 13% in job cuts in the general economy over the same period.

Microsoft will announce second-quarter earnings on January 24. The software company’s Azure cloud computing business drove revenue growth for the three months through September, as sales at its personal computing division dipped slightly.