Microsoft may currently be tremendously lucrative, but the corporation is letting go of a portion of its workers, much like other large prosperous companies, most notably Google and Facebook. The business revealed yesterday that it would let go of 10,000 employees, or about 5% of its whole staff. Some laid-off employees will be informed right away, while others will be informed in the coming weeks and days.
Given the slump in the tech sector, the move was widely anticipated. Even though they are currently successful, large tech businesses have gone on a hiring binge out of fear of potential adverse headwinds. Both Google and Facebook have laid off thousands of employees, and now Microsoft has joined the list.
Intriguingly, Microsoft CEO Satya Nadella justified the decision as being required so that the business could concentrate on both immediate and long-term prospects. Here is the complete blog post that Nadella published on the company’s layoffs for Microsoft employees.
As I interact with clients and partners during these times of profound upheaval, a few things become very evident. First, clients are now optimising their digital spend to accomplish more with less, just as we saw them increase their digital spending during the pandemic. Additionally, firms across all sectors and regions are being cautious as some regions of the world are currently experiencing a recession while others are bracing for one. At the same time, as we transform the most cutting-edge models in the world into a new computing platform, the next big wave of computing is emerging.
This is the environment in which our organisation must work to continuously generate results while investing in our long-term prospects. Although we must take steps based on three principles, I’m optimistic that Microsoft will come out of this stronger and more competitive.
First, we’ll match our cost structure to our revenue and consumer demand projections. Through the conclusion of the third quarter of FY23, the adjustments we are making today will cause a 10,000-job reduction in our total workforce. With some notifications occurring today, this represents less than 5% of our whole employee base. It’s crucial to understand that even while we are cutting positions in some sectors, we will keep hiring in crucial critical areas. We are aware that each person affected is going through a trying moment right now. I am committed to doing this process with the senior leadership team in the most deliberate and open manner possible.
Second, we will continue to invest in areas that are crucial to our future, which means we will divest from businesses that are not contributing to the company’s long-term growth and competitiveness. These are the kinds of difficult decisions we have had to make over the course of our 47-year history to continue to be a significant business in a sector that is harsh on those who fail to adapt to platform changes. As a result, we will incur a $1.2 billion charge in Q2 for severance expenses, adjustments to our hardware portfolio, and the cost of consolidating leases as we increase workspace density.
Thirdly, we shall act ethically and with respect for all of our personnel. Although unpleasant, some choices must be made. They are particularly challenging since they affect others, including our friends and coworkers, and their lives. All people whose responsibilities are removed will have our whole support during these changes, we are committed to making sure. Benefits for U.S.-benefit-eligible employees include above-market severance pay, extended healthcare coverage for six months, continuous stock award vesting for six months, career transition services, and 60 days’ notice before termination, regardless of whether such notice is legally needed. Benefits for workers outside the United States will follow each nation’s employment regulations.
When I consider this point in time, the beginning of 2023, it’s showtime for both Microsoft and our sector. As a business, we must align our success with that of the entire globe. To produce meaningful innovation that customers, communities, and nations can actually benefit from, everyone of us and every team within the organisation must raise the bar and outperform the competition. It’s that simple: if we accomplish this, we will become stronger and continue to prosper for a very long time.
I want to express my sincere appreciation and thanks to everyone who has helped Microsoft so far and to all of you who will do so as we move forward. We appreciate your daily dedication, perseverance, and focus on Microsoft, our clients, and partners.
