Microsoft has announced that it will be laying off 10,000 employees over the coming months, becoming the latest tech giant to significantly reduce its headcount. The decision was announced in a blog post on Wednesday, which was also shared with Microsoft’s employees. In the post, CEO Satya Nadella stated that the layoffs were a result of decreased consumer spending after the pandemic, and a need to “deliver results on an ongoing basis, while investing in our long-term opportunity.”
While it’s true that the company will be eliminating roles in certain areas, it will also continue to hire in key strategic areas. These areas are likely to include artificial intelligence, with the CEO acknowledging surging interest and advancements in the technology. Rumours are also currently circulating that Microsoft is considering investing several billion dollars in OpenAI, the company behind popular artificial intelligence chatbot ChatGPT.
The layoffs will impact approximately five percent of the company’s workforce, which was around 221,000 full-time employees in mid-2022. Microsoft will be rolling out the layoffs through March, giving employees some time to prepare for the worst.
In addition to the 60 days’ notice prior to their termination, eligible U.S. employees will also receive “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, [and] career transition services.” Employees outside the U.S. will be entitled to whatever their local laws entitle them to.
It’s worth noting that while this news is certainly unfortunate, Microsoft is at least not doing its cuts in one fell swoop, unlike some other companies. The CEO, Satya Nadella, acknowledged that these decisions are difficult, but necessary and the company is committed to ensuring that all those whose roles are eliminated have its full support during these transitions.
