Microsoft to cut 10,000 jobs as tech lay-offs intensify

Microsoft has cut 10,000 workers, almost 5 per cent of its workforce, in response to what it described as "macroeconomic conditions and changing customer priorities".

Key points:

  • The lay-offs affect about 5 per cent of the employees
  • Microsoft said it was important to build a new computer platform using AI
  • Other tech companies have been cutting jobs amid concerns about an economic slowdown

The company said in a regulatory filing on Wednesday that it had just notified employees of the lay-offs, some of which will begin immediately.

The company said it will also be making changes to its hardware portfolio and consolidating its leased office locations.

The lay-offs represent "less than 5 per cent of our total employee base, with some notifications happening today," CEO Satya Nadella said in an email to employees.

"While we are eliminating roles in some areas, we will continue to hire in key strategic areas," Mr Nadella said.

He emphasised the importance of building a "new computer platform" using advances in artificial intelligence.

He said customers that were accelerating their spending on digital technology during the pandemic are now trying to "optimise their digital spend to do more with less".

"We're also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one," Mr Nadella wrote.

Other tech companies have also been trimming jobs amid concerns about an economic slowdown.

Amazon and business software maker Salesforce earlier this month announced major job cuts as they prune payrolls that rapidly expanded during the pandemic lockdown.

Amazon said that it will be cutting about 18,000 positions.

It is the largest set of lay-offs in the Seattle company's history, although just a fraction of its 1.5 million global workforce.

Facebook parent Meta is laying off 11,000 people, about 13 per cent of its workforce.

Elon Musk, the new Twitter CEO, has slashed the company's workforce.

Mr Nadella made no direct mention of the lay-offs on Wednesday when he made an appearance at the World Economic Forum's annual meeting this week in Davos, Switzerland.

When asked by the forum's founder Klaus Schwab about what tech lay-offs meant for the industry's business model, Mr Nadella said companies that boomed during the COVID-19 pandemic are now seeing "normalisation" of that demand.

"Quite frankly, we in the tech industry will also have to get efficient, right?" Mr Nadella said.

"It's not about everyone else doing more with less. We will have to do more with less. So we will have to show our own productivity gains with our own sort of technology."

Microsoft didn't immediately respond to questions about where the lay-offs and office closures would be concentrated.

As of June 2022, it had 122,000 workers in the US and 99,000 elsewhere.



Story published on ABC News Australia

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ABC with AP