More layoffs in the technology sector: Microsoft cuts 10,000 jobs

First modification: 01/18/2023 – 18:44

A new mass layoff hits the technology sector. This time the American company Microsoft announced that it will lay off 10,000 workers, almost 5% of its workforce.

Some of the withdrawal notifications have already begun to be delivered this Wednesday, January 18, and would conclude at the end of March, said chief executive Satya Nadella.

Regarding the causes, the company indicated that it is a response to “macroeconomic conditions and changing customer priorities.”

The wave of job layoffs comes after the company added massive jobs during the Covid-19 pandemic, as the tech giant responded to a further boom in demand for its cloud computing software and services. . By then millions of people were inserted into remote jobs and students continued to educate themselves from home.

Against this background, Microsoft’s workforce had increased by 36% in the two fiscal years after the emergence of the health emergency. It went from 163,000 workers at the end of June 2020 to 221,000 in June 2022, almost half of them in the United States.

The CEO explained that customers who ramped up their digital spending during the pandemic are now trying to “optimize their digital spend to do more with less.”

“We are also seeing organizations across industries and geographies being cautious as some parts of the world are in a recession and other parts anticipate it,” Nadella stressed.

The news is particularly negative for Microsoft, a software maker that has invested heavily in generative artificial intelligence that represents a bright spot in the industry.

Pandemic and technological growth, a rebound effect for the sector

The layoff adds to tens of thousands of job cuts across the tech sector that is outpacing its relentless growth during the health emergency.

Other companies in the industry have also been cutting jobs amid concerns about an economic slowdown.

Amazon and business software maker Salesforce earlier this month announced major job cuts as payrolls shrink, which expanded rapidly during lockdowns and travel bans imposed in different countries by Covid-19.

Amazon announced that it will cut around 18,000 jobs. It’s the biggest layoff notice in the history of the Seattle-based company, though it also indicated that it’s only a fraction of its global workforce, estimated at 1.5 million people.

For its part, Facebook’s parent company, Meta, reported the withdrawal of 11,000 people, around 13% of its workforce. And Elon Musk, the new CEO of Twitter, has also axed jobs at the company.

However, the executive director of Microsoft qualified when pointing out that “although we are eliminating roles in some areas, we will continue hiring in key strategic areas”, such as artificial intelligence.

“The next big wave of computing is being born with advances in AI (artificial intelligence), as we are turning the world’s most advanced models into a new computing platform,” Nadella said.

However, the company is also dealing with a slump in the personal computer market, leaving less demand for its Windows and accompanying software.

With Reuters and AP