Understand why Microsoft will lay off thousands of employees

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

Microsoft is also dealing with a slump in the personal computer market after a big tree in the early years of the pandemic. Nadella points out that the big tech would be making changes to adapt to the next big wave of computing.

The executive points out that the company is going through times of important changes and it is necessary to note that, despite being eliminating functions in some sectors, the Microsoft will continue to hire in key sectors. Nadella further points out that these are the kinds of tough choices that have been made over its 47-year history to remain an important company in this industry, which is relentless with those who don't adapt to platform changes.

Microsoft laid off 1 employees in 2022

Even with the 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 failing to invest elsewhere.

The company's CEO concluded that the senior leadership team and the same have the commitment that, when going through this process, everything will be done in the most transparent and careful way possible. Microsoft and its customers and partners every day.

Microsoft issued a statement in July last year, stating that a small number of functions had been eliminated, while news site Axios reported in October that the tech had laid off about 1 employees in various divisions.

Big Techs Lost Nearly $4 Trillion in Just 1 Year

The Big Techs group, made up of companies such as Apple, Amazon, Microsoft, Meta (company that owns Facebook, Whatsapp and Instagram) and Alphabet (Google), lost US$ 3,901 trillion in market value in the last year. This is equivalent to approximately R$ 21 trillion, in the quotation of January 4th.

Simultaneously, industry billionaires also saw their fortunes reduce, as is the case with Elon Musk, who ceased to be the richest man in the world in December. Since November 2021, his net worth has shrunk by $212 billion, according to Bloomberg.

To begin to understand the situation of big-tech, it is necessary to consider the continued hikes in interest rates in the US to contain inflation. In addition to impacting sales, the scenario has made companies reduce their advertising spending, impacting the giants in the technology sector, which depend on ads.

Google, for example, even had a slight expansion in revenue from advertising in the 3rd quarter of 2022, however that coming from advertising on Youtube fell by 2%. And Alphabet's revenue rose the lowest since 2013.