Microsoft Will Lay Off 10,000 Employees Due to Weakened Economic Conditions and Decline in Computer Sales

Written by Valdemar Medeiros

Published on 19/01/2023 at 11:42

Foto: Microsoft/Divulgação

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Due to the weakening in the technology scenario, the industry giant, Microsoft, plans to lay off more than 10 thousand employees. The company emphasizes that those laid off will receive assistance and benefits.

Large companies announce mass layoffs at the beginning of 2023 and the market is concerned about what might happen to the Brazilian economy. On Wednesday (18), Microsoft, a giant in the technology market, announced that it will lay off about 10 thousand employees by the end of the third quarter of fiscal year 2023, which occurs between the months of April and June. The layoff represents about 5% of the total employee base, according to the company. In a statement, Satya Nadella, CEO of Microsoft, states that customers want to optimize their digital spending in search of cost-benefit and to be cautious, since some parts of the world are in recession and others are anticipating one.

Understand Why Microsoft Will Lay Off Thousands of Employees

According to the company, eligible laid-off employees will receive severance pay, medical assistance for 6 months, career transition services, and a 60-day notice before contract termination.

Microsoft is also dealing with a decline in the personal computer market after a major boom in the early years of the pandemic. Nadella emphasizes that the big tech is making changes to adapt to the next big wave of computing.

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The executive highlights that the company is experiencing significant changes and it is important to note that, despite eliminating roles in some areas, Microsoft will continue to hire in key sectors. Nadella also points out that these are the kinds of difficult choices that have been made throughout its 47-year history to remain an important company in this sector, which is unforgiving to those who do not adapt to platform changes.

Microsoft Laid Off 1 Thousand Employees in 2022

Even with large-scale layoffs, the company will continue to invest in areas for the future, reallocating talent and capital to areas of secular growth and long-term competitiveness for the company while ceasing investments in other sectors.

The company’s CEO concluded that the senior leadership team and he are committed to ensuring that, throughout this process, everything will be done as transparently and carefully as possible. Nadella thanks the focus, resilience, and dedication that employees demonstrate for Microsoft and its customers and partners every day.

Microsoft spoke out in July of last year, stating that a small number of roles had been eliminated, while the news site Axios reported in October that the technology giant had laid off about 1 thousand employees across various divisions.

Big Techs Lose Nearly US$ 4 Trillion in Just 1 Year

The group of Big Techs, made up of companies like Apple, Amazon, Microsoft, Meta (the company that owns Facebook, Whatsapp, and Instagram) and Alphabet (Google), lost US$ 3.901 trillion in market value over the past year. This is equivalent to approximately R$ 21 trillion, at the exchange rate of January 4.

At the same time, billionaires in the sector also saw their fortunes decrease, such as Elon Musk, who stopped being the richest man in the world in December. Since November 2021, his net worth has shrunk by US$ 212 billion, according to Bloomberg agency.

To start understanding the situation of big techs, it is necessary to consider the consecutive increases in the interest rate in the US to curb inflation. In addition to impacting sales, the scenario has caused companies to cut back on their advertising spending, severely impacting the tech giants, which rely on ads.

Google, for example, did experience a slight revenue expansion from advertising in Q3 2022; however, revenue from YouTube ads fell by 2%. And Alphabet’s revenue had the slowest growth since 2013.

Microsoft Will Lay Off 10,000 Employees Due to Weakened Economic Conditions and Decline in Computer Sales

Due to the weakening in the technology scenario, the industry giant, Microsoft, plans to lay off more than 10 thousand employees. The company emphasizes that those laid off will receive assistance and benefits.

Understand Why Microsoft Will Lay Off Thousands of Employees

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

Microsoft Laid Off 1 Thousand Employees in 2022

Big Techs Lose Nearly US$ 4 Trillion in Just 1 Year

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Microsoft Will Lay Off 10,000 Employees Due to Weakened Economic Conditions and Decline in Computer Sales

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Understand Why Microsoft Will Lay Off Thousands of Employees

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