CEO Satya Nadella announced a series of layoffs in a company blog post addressed to all Microsoft employees.
The announced layoffs represent less than 5% of Microsoft’s total workforce but will cost the company $1.2 billion in severance costs in the second quarter of 2023.
Microsoft has announced that it will begin eliminating a total of 10,000 positions starting today and ending at the end of the third quarter of fiscal 2023. In a company-wide blog post published on May 18. 1, CEO Satya Nadella discussed the layoffs as well as outlined what he feels Microsoft must focus on to ensure that the company will be equipped to deal with the current economic downturn and future while maintaining growth.
Between the games division, software development, and operating systems, Microsoft continues to be a world-renowned brand that influences both games and the industry in a variety of ways. With more than 220,000 employees worldwide, the announced layoffs represent less than 5% of Microsoft’s total workforce but will cost the company $1.2 billion in severance costs in the second quarter of 2023.
The executive wrote that these costs include severance pay for qualified employees working in the United States, which will be above normal market value, ongoing health insurance for the six months, career transition services, and 60-day notice of termination regardless of state requirement. He also wrote that employees affected by company layoffs outside the United States will receive benefits consistent with the laws of their countries.
Losing so many employees will likely affect every part of Microsoft in some way.
“Microsoft will continue to hire people in some strategically important areas while eliminating others,” Nadella also wrote in the company-wide blog post. One of these strategic areas could be artificial intelligence as over the past few years Microsoft has acquired businesses with that particular focus. Companies like Nuance Communications, the most used AI and speech recognition software provider in healthcare, were acquired by Microsoft in March 2022 for $18.8 billion.
The CEO also noted that Microsoft saw an increase in spending on digital services in the early days of the pandemic, but lately it seems most consumers are trying to only use what they don’t. they had. This comes after the company’s first fiscal quarter saw net income drop 14% to $17.56 billion as sales of new computers slowed. They can still cover these losses with Microsoft’s cloud-based services, which have grown by 11% in revenue to $50 billion in the same time period.
While it’s not clear where exactly these layoffs will take place, the loss of so many employees will likely affect every part of Microsoft in some way. These may include employees in the Xbox community, although Microsoft has seen revenue growth from its Xbox brand of around 3% in 2022 and recently set a quarterly profit record for the console. Microsoft’s games division. Regardless of corporate profits, it has become almost normal for Microsoft and others to continue their trend of mass layoffs in the new year. Even so, people will want to continue to flock to work for a brand like Microsoft, which continues to dominate across various entertainment and technology-based sectors.
