Microsoft announced Wednesday it plans to lay off 10,000 employees to help cut costs.
CEO Satya Nadella said in a statement the layoffs were initiated to help “align our cost structure with our revenue and where we see customer demand.” The tech giant currently employs 220,000 workers, and the new round of layoffs will represent 5% of the workforce.
The laid-off employees will be given “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.”
Nadella cited the transition from the COVID pandemic as a reason for the layoffs. “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” the Microsoft CEO wrote.
“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,” he added.
The severance costs, along with changes to Microsoft’s hardware portfolio and office lease reduction will add up to a $1.2 billion charge in quarter two.
Microsoft CEO Satya Nadella, to staff:
“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.”https://t.co/gynogH6a3U
— David Gura (@davidgura) January 18, 2023
Employees working in Microsoft’s engineering and human resources departments are expected to lose their jobs, Reuters reported. (RELATED: Crypto Platform Coinbase Will Lay Off 20% Of Its Staff)
Multiple leading technology companies have announced workforce reductions in recent months after experiencing hiring surpluses during the COVID-19 pandemic.
Amazon, Twitter, Salesforce, Coinbase and Meta have all reduced their workforces to cut costs.