Microsoft CEO Satya Nadella has introduced as much as 10,000 job cuts, with notices going out to affected workers as early as right this moment. In a memo circulated to workers and revealed on-line, Nadella outlined the financial circumstances which can be forcing “hard choices” similar to this, however acknowledged that Microsoft will proceed to spend money on “strategic areas” for its future. The complete variety of workers to be laid off signify lower than 5 p.c of Microsoft’s complete workforce, in keeping with Nadella. The layoffs had been anticipated, with rumours leaking earlier right this moment. As per stories, Microsoft had 221,000 workers as of June 2022, with 99,000 of these exterior the US. Other massive tech firms together with Twitter, Amazon and Meta have additionally laid off vital numbers of workers not too long ago due to a worldwide financial downturn.
In the company-wide memo, Nadella cited diminished shopper spending because the COVID-19 pandemic has turn into much less extreme, and the truth that many elements of the world are going through financial recession. The layoffs are essential to align value buildings with projected income, and Microsoft will proceed to rent new assets the place wanted. While some affected workers shall be notified instantly, the method is predicted to be full solely by Q3 2023.
Promising to deal with all workers “with dignity and respect”, and act transparently, Nadella dedicated to serving to these laid off by way of ample discover intervals, profession transition companies, persevering with employment advantages, above-market severance pay, and inventory choice vesting, in accordance with legal guidelines and rules in varied nations. The value of severance in addition to consolidating leased workplace area is predicted to be $1.2 billion this yr. It was not instantly clear how most of the affected workers are within the US and what number of work in different places.
Even via this course of, Microsoft says it should proceed investing its cash and other people in key strategic areas for future progress, that are more likely to contain AI. The memo ends with Nadella thanking all Microsoft workers for his or her dedication and resilience, however features a warning that everybody should carry out higher for the corporate to thrive.