News about Microsoft layoffs is back again as the tech giant will try to relieve more than 10,000 workers of their jobs in the company. Chief Executive Satya Nadella said in a blog post the company would be forced to lay off about 5% of the total headcount of employees in the company.
In the official statement, Satya Nadella said the company decided to reduce the number of people working for them because of the effects of the world economy. He mentioned the global economy has been weak for a long time, and they are taking drastic measures to ensure the company isn't severely affected.
Technology news has been filled with layoffs in recent months, and Microsoft has appeared again as the latest firm to do that. According to a US Securities and Exchange Commission filing, Microsoft has about 221,000 full-time employees globally as of June 30, 2022. Reducing that number by 10,000 people makes approximately a 5% reduction in the number of employees working for the company.
Nadella first highlighted what is happening, saying, "We’re living through times of significant change, and as I meet with customers and partners, a few things are clear. First, as we saw customers accelerate their digital spending during the pandemic, we’re now seeing them optimize their digital spending to do more with less. We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform."
Microsoft Laying Off Workers Due to Low Customer Spending Power
In the memo the company executive sent the employees, they made it known they decided because of the low spending power of customers. Microsoft has seen a drop in the demand for their laptops as many consumers focus now on smartphones rather than laptops. Also, the global market is suffering from low demand and spending power among customers.
"First, we will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today. It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted," Nadella said in the blog post.
The employees affected by the Microsoft layoffs will be greatly compensated, according to the company. They highlighted in their official press release that the company would ensure that those laid off receive numerous benefits and packages.
"U.S.-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination, regardless of whether such notice is legally required. Benefits for employees outside the U.S. will align with the employment laws in each country," Microsoft added.