- A Microsoft spokesperson confirmed that the company is conducting another round of layoffs, owing to organizational and workforce adjustments
- Exactly how many people will be let go is still unknown. However, it is expected to affect multiple departments and locations.
- This wasn’t unexpected since the company recently ended its last fiscal year. And it’s natural for companies to go through some organizational restructuring during this time.
Microsoft conducted a fresh round of layoffs this week. The total number of employees that will be affected by the layoff has not been revealed, but it’s been confirmed that it will affect different teams and locations.
Posts on LinkedIn suggest that most of the job cuts will happen in product and program management functions.
The news was also confirmed by a Microsoft spokesperson, who said that this is a part of usual organizational and workforce adjustments.
“We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.” – Microsoft spokesperson
Microsoft & Layoffs
The news is not all that surprising given the time of the year. The company’s fiscal year ended on June 30 and it’s normal for companies to go through some restructuring. Microsoft did something similar in 2023 as well as in the first few months of 2024.
For example, last month, Microsoft cut 1,000 jobs across the Azure cloud unit and HoloLens mixed-reality organization.
Similarly, in January of this year, 2,000 employees were laid off from Microsoft’s gaming unit just a few months after it acquired Activision Blizzard for $69 billion—one of the comapny’s biggest deals so far. It also fired its entire Ethics and Society Team in March 2023.
So, why is Microsoft letting so many people go?
Mass Hiring
The first reason is the hiring surge during the pandemic. A lot of companies between 2020-2022 ended up hiring more people to keep up with the increased demands.
However, as people started stepping out again post the pandemic, the demand for tech products went down and these companies were stuck with too many people but not enough work. Hence, some had to be let go.
By the end of 2022, Microsoft had 2,32,000 people, whereas at the end of 2023, its headcount dipped to 2,27,000.
Impact of AI
The other unsurprising reason is AI. The tech industry right now is going through a massive makeover with things like automation and cloud computing taking the front seat.
Hence, a lot of companies are going through restructuring, which basically means people are being let go, departments are being merged, and funds are being reallocated.
It’s also worth noting that Microsoft isn’t the only company that’s conducting multiple rounds of layoffs. Five major companies announced layoffs in March of this year.
- Dell laid off 6,000 employees in the face of falling demand and revenue.
- IBM is also planning to replace 8,000 roles within the company.
- Tesla released an internal memo that said that 10% of the company’s workforce would be laid off. Musk has already fired the entire Supercharge team, in addition to another 600 layoffs in May.
- Meta also announced its plans to lay off around 10,000 employees in April and May.
- Companies like Unity and Discord are also seeing massive change, with 25% and 17% of their workforce being laid off.
In total, tech companies laid off 260,000 employees last year. Speaking of the current year, 100,000 employees have already been let go in just the first six months.
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