Microsoft Laid Off Up To 1% Of Company Workforce


As economic uncertainty mounts, Microsoft (NASDAQ:MSFT) has become one of the latest Big Tech companies to cut jobs. 

Despite plans to grow its headcount in the coming months, Bloomberg reports that the company is “realigning business groups and roles” following the close of its fiscal year (on June 30).

According to the report, the layoffs reportedly affected less than 1% of Microsoft’s 181,000-person workforce. In addition, they did not follow any apparent pattern concerning the geography of product division, affecting teams such as customer and partner solutions and consulting. They come after Microsoft slowed hiring in the Windows, Teams and Office groups while assuring that recruitment hadn’t been affected by industry headwinds.

Microsoft (NASDAQ:MSFT) has a strong presence in the Research Triangle and North Carolina. And according to the WRAL TechWire Jobs Report, the company’s website has 92 job postings in the Triangle as of this weekend, which is significantly lower than the number of openings just a few weeks before, when there were over 200 openings. 

On July 12, 2022, Microsoft (NASDAQ:MSFT) told Bloomberg that the company eliminated only a tiny number of roles and that, like all companies, it is evaluating its business priorities regularly to make structural adjustments accordingly. And as part of this strategy, the company also said it would continue to in the business and grow headcount overall in the year ahead.

With $49.4 billion in revenue, Microsoft reported strong earnings in Q3, with cloud revenue rising 26% year-over-year. However, the company revised its fourth-quarter revenue and earnings guidance in early June, citing foreign exchange fluctuations.

Microsoft Isn’t Only Company Making Job Cuts

According to Bloomberg, Microsoft (NASDAQ:MSFT) typically announces job cuts shortly after the July 4 holiday in the U.S. to prepare for the new fiscal year.

Over the past few months, layoffs have accelerated within the sector. As a result, investors have pulled back due to fear. The ones affected within the industry are usually startups, especially those in capital-intensive businesses such as events and fintech, and deliver, which have had to suffer the worst effects. For example, it is reported that Oracle is considering a $1 billion cost-reduction initiative that would include thousands of layoffs. 

Besides Oracle and Microsoft (NASDAQ:MSFT): 

  • Twitter cut nearly 33% of its recruiting team last week. 
  • Over the past month, Tesla has laid off hundreds of employees.
  • To overcome looming economic headwinds and ensure long-term growth, Snyk cut about 30 employees from its workforce. 
  • Cybersecurity technology developer IronNet reported n a recent regulatory filing that it would lay off about fifty-five of its employees, or about 17% of its total workforce. 
  • OneTrust, a leading software developer, slashed its headcount by about 950 people, or nearly 25% of the company.
  • Even groups at Meta are preparing for massive layoffs after managers at the company were reportedly told to “move to exit” poor performers. CEO Mark Zuckerberg perceives Meta as experiencing “one of the worst downturns … in recent history.” This may explain why the company previously announced that it would reduce its target for new engineer hires by almost 30%.

What’s more, Nvidia, Snap, Uber, Lyft, Intel, Spotify, Salesforce, and Google are some of the few publicly traded tech companies that cut back on hiring this spring into summer. The few notable giants in the space that haven’t made such moves are IBM and Amazon. 

How much is the recession potentially affecting Microsoft (NASDAQ:MSFT)? According to Morgan Stanley, Microsoft is facing some headwinds with signs of decelerating IT budgets ahead of a potential slowdown.

The investment bank says that although Microsoft screens well relative to many software competitors, it is not entirely immune to macroeconomic conditions. This statement warns investors to watch out for negative trends in Microsoft’s consumer products, such as gaming and consumer subscriptions to Office 365. 

Featured Image: Depositphotos @wolterke

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