Microsoft May Cut 10,000 Jobs This Week

Microsoft
(Image credit: Shutterstock)

Multiple sources, including Bloomberg and Sky News (opens in new tab), confirm that Microsoft will announce wide-ranging layoffs across "a number of engineering divisions." Microsoft currently employs over 221,000 workers globally, and this newest round of cuts could see that figure slashed by 5 percent. If true, more than 10,000 workers will, unfortunately, lose their jobs. 

The official announcement of the layoffs could come as early as Wednesday. Microsoft's hiring exploded during the pandemic as more people worked from home and relied on the company's software products and cloud services. In September 2022, CEO Satya Nadella confirmed that the company hired 50,000 people between 2020 and 2022. Now, as the global economy slows and fears of a lingering recession materialize, Microsoft is focused on cutting costs.

"We did have a lot of acceleration during the pandemic, and there's some amount of normalization of that demand," said in an interview with CNBC earlier this month. "[There are] clearly many, many challenges right now around the world. For us as a global company, we're not going to be immune from what's happening in the macro. We'll also have to get our own operational focus to make sure our expenses are in line with our revenue growth." 

We should note that Microsoft isn't the only big tech firm faced with reducing its workforce. For example, Facebook's parent company Meta eliminated 11,000 jobs in 2022, and Amazon revealed two weeks ago that it would lay off 18,000 employees during 2023 (nearly double what earlier reports had suggested). Likewise, Salesforce announced this month that it would lay off 10 percent of its workforce (roughly 8,000 employees).

According to Microsoft's June 30th regulatory filing, 122,000 of its full-time employees are based in the United States. The remaining 99,000 work from the company's various offices around the globe. It is likely that Microsoft's U.S. workforce will take the brunt of the looming cuts. 

Microsoft will update investors on its financial performance on January 24th. During fiscal Q1 2023 (opens in new tab), Microsoft reported an 11 percent increase in revenue to $50.1 billion (an 11 percent increase year-over-year) and net income of $17.6 billion (a 14 percent decrease year-over-year).

"In a world facing increasing headwinds, digital technology is the ultimate tailwind," said Nadella at the time. "We're focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way."

Brandon Hill is a senior editor at Tom's Hardware. He has written about PC and Mac tech since the late 1990s with bylines at AnandTech, DailyTech, and Hot Hardware. When he is not consuming copious amounts of tech news, he can be found enjoying the NC mountains or the beach with his wife and two sons.

  • ezst036
    A company I recently worked for was migrating (I would say upgrading) some of its Windows servers to Linux, for greater flexibility, performance, as well as reduced licensing costs.

    I suspect that a down economy will be a boon for Linux usage.
    Reply
  • bigdragon
    I keep seeing economists warn of impending recession while the news talks about a "soft landing" instead. I think all these big corporate layoffs are going to guarantee a recession happens. Seems like a lot of layoffs for companies having little problem generating tons of profits. Trimming the fat is necessary sometimes. This time seems different given where tech profits have been recently.
    Reply
  • DavidLejdar
    Somewhat difficult for me to understand that Microsoft is like: "We need to lay off staff, to increase our profit.", and for Mr Gates to then be like: "And part of that profit we will spend on finding innovative ways to fight poverty."

    At least in my view, having a job helps me more than to just attend a workshop talking about how they want to empower me. Which isn't to say that there is no point in research etc. But with i.e. $7bn a year, there could be more than a million jobs e.g. in Africa, including quite some tax funds some countries might use for universities, which itself allocate research grants (instead of a system where some private foundation picks some labs to work on the behalf of the people, who don't have any part in it at all).
    Reply
  • PlaneInTheSky
    Microsoft invested a lot in "VR", "MetaVerse" and "AI". Buzzword technologies that seem to be going nowhere fast.
    Reply
  • Mandark
    I hate the term AI, because there is no semblance of intelligence whatsoever. Computers cannot, and never will be able to feel or understand, or be conscious. Therefore, there is no intelligence.

    consciousness is not computable. And it never will be. It’s in the realm of human beings and animals, but not computers. AI will never get anywhere useful
    Reply
  • sizzling
    Mandark said:
    I hate the term AI, because there is no semblance of intelligence whatsoever. Computers cannot, and never will be able to feel or understand, or be conscious. Therefore, there is no intelligence.

    consciousness is not computable. And it never will be. It’s in the realm of human beings and animals, but not computers. AI will never get anywhere useful
    I’ve not been keen on the term either. I work in finance and often work on projects for improving their processes and systems. How many times a salesperson will say their software AI is going to save X but their definition of AI is far from mine. Often when you dig into it the company/users have to create and maintain the rules that will be used and there is minimal to no actual learning. To me that’s not AI. However, the decision makers just love the term AI and usually don’t look past it.
    Reply
  • eye4bear
    DavidLejdar said:
    Somewhat difficult for me to understand that Microsoft is like: "We need to lay off staff, to increase our profit.", and for Mr Gates to then be like: "And part of that profit we will spend on finding innovative ways to fight poverty."

    At least in my view, having a job helps me more than to just attend a workshop talking about how they want to empower me. Which isn't to say that there is no point in research etc. But with i.e. $7bn a year, there could be more than a million jobs e.g. in Africa, including quite some tax funds some countries might use for universities, which itself allocate research grants (instead of a system where some private foundation picks some labs to work on the behalf of the people, who don't have any part in it at all).
    Mr. Gates? Bill Gates has had nothing to do with Microsoft for years...
    Reply
  • Mandark
    Hopefully the best of the best that get laid off might start their own companies that become successful

    I support independent software developers. Like the folks who make Fork. One of the best git clients around on any platform. They got my license fee because they deserve it with a great product
    Reply
  • Tom Sunday
    bigdragon said:
    I keep seeing economists warn of impending recession while the news talks about a "soft landing" instead. I think all these big corporate layoffs are going to guarantee a recession happens.

    I feel bad for the 10,000 MS workers now being laid off. For many years now good fulltime jobs and especially with well paying ‘Fortune 500’ companies (offering real benefits and campus like workplaces) have almost been impossible to come by. Thus 2023 is going to be another hard year for a lot of people. Further most tech companies are now reducing their office space leases meaning that the WFH concept is essentially dead in the water. No place to come back too! We are also now in the ‘second phase’ of our 'tech-downturn' whereby customers have already decreased their digital spending and now reducing their spending altogether due to the continued economic turmoil. Obviously Amazon gotten the message already a few months ago by furloughing as much as 18,000+ workers. I wish that there would be better news!
    Reply
  • bit_user
    Tom Sunday said:
    Amazon gotten the message already a few months ago by furloughing as much as 18,000+ workers.
    That wasn't a furlough, it was a layoff. Furlough is when you remain employed, but it's essentially like being on unpaid leave.
    Reply