Ten thousand Microsoft staffers will lose their jobs in the coming months, CEO Satya Nadella confirmed in a written statement.

Earlier today, we covered rumours of a layoff round at Microsoft. Insiders said the tech giant would disclose the plan today. Meanwhile, confirmation has arrived. CEO Satya Nadella revealed that Microsoft will lay off 10,000 employees between now and the third quarter of 2023.

Microsoft layoffs

Earlier media reports suggested 11,000 cuts. Microsoft shared a lower figure, but the move is drastic nonetheless. 10,000 jobs equal about five percent of the tech giant’s entire workforce.

“It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas”, Nadella said. The CEO did not confirm which departments will be affected.

“These decisions are difficult, but necessary”, Nadella added. “We are committed to ensuring all those whose roles are eliminated have our full support during these transitions.”

The CEO said that terminated employees in the United States receive compensation and six months of extended health insurance. Support for employees outside the United States depends on local labour laws.

Cost savings

Microsoft’s stock price dropped over the course of last year. Demand for the company’s services and products exploded during the height of the COVID-19 pandemic. As the virus faded, demand declined.

The layoffs are intended to cut costs. The tech giant wants to guarantee more profits for investors. In addition to job cuts, Nadella announced that Microsoft hopes to reduce rent by consolidating offices.

Industry-wide

Several companies hired large numbers of employees as demand for technology increased during the COVID-19 pandemic. Meanwhile, the situation has changed. Some organizations can no longer afford the workforce they inflated over the past two years.

Two weeks ago, Amazon announced a major round of layoffs. Earlier, Meta and Salesforce disclosed similar plans. Microsoft is not the first, and certainly not the last. Economic uncertainty persists for now.

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