Microsoft Chairman and CEO Satya Nadella said on Wednesday that the company “will make changes that will result in a reduction of 10,000 jobs across our total workforce by the end of FY23 (Q3).”
Microsoft currently has over 220,000 employees, and this round of layoffs affects about 5 percent of its workforce.
Nadella said some workers would be notified on Wednesday, but the full 10,000 layoffs should be completed by the end of March.
one in blog postNadella said it was important to note that “while we are eliminating roles in some areas, we will continue to recruit in important strategic areas”.
“We know this is a challenging time for everyone affected. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent manner possible,” said the Microsoft CEO.
The company had laid off around 1,000 employees last year.
Nadella said organizations across industries and geographies are taking precautions because some parts of the world are in recession and others are anticipating it.
“We will align our cost structure with our revenue and where we see customer demand,” he said.
He added that Microsoft is taking a $1.2 billion charge in the second quarter related to “severance costs, changes to our hardware portfolio, and lease consolidation costs as we create higher densities in our workspaces”.
“We will treat our people with dignity and respect and work in a transparent manner. These decisions are difficult but necessary. They are particularly difficult because they affect people and people’s lives – our colleagues and friends,” the Indian-origin Microsoft CEO said.
“US-benefits-eligible employees will receive a variety of benefits, including above-market severance pay, continued health care coverage for six months, continued vesting of stock awards for six months, career transition services, and termination 60 days’ notice is included, even if such notice is required by law,” he declared.
Benefits for employees outside the US will be consistent with employment laws in each country. Microsoft is set to announce its fiscal second quarter 2023 earnings on January 25. Tech giants Amazon and Meta have joined massive tech layoffs amid deepening global uncertainties over funding.
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