Microsoft has joined the group of big tech companies downsizing their workforce as economic uncertainty prevails. The Microsoft layoff is expected to impact less than 1% of its employees but when you have a workforce of approximately 181,000 employees worldwide, it is no small number.
Is Microsoft laying off employees?
On July 12, in a statement, Microsoft mentioned, “We notified a small number of employees that their roles have been eliminated. This was a result of a strategic realignment, and, like all companies, we evaluate our business on a regular basis. We continue to invest in certain areas and [expect to] grow headcount in the year ahead.”
The tech giant did not clarify as to what pattern has been followed in initiating the Microsoft job cuts. Bloomberg News revealed that it “spanned a variety of groups including consulting and customer and partner solutions and were dispersed across geographies.” Microsoft told the news agency that they periodically review their business priorities and make necessary changes. However, despite the recent Microsoft layoffs, the Washington-based tech company will continue to focus on development and grow their headcount by the end of the year.
In 2020, Microsoft layoffs had impacted more than 1,00 employees as it cut jobs from its MSN news service. Prior to the Microsoft job cuts of full time employees, it had informed 50 news production contractors that their jobs would end in June. During the pandemic, the software company had also made the decision to shut all its brick-and-mortar stores, most of which were spread across the US, the UK, Canada, and Australia.
The Microsoft layoffs could also be a result of lack of buyers in the PC market. As the company focuses on cloud computing and other online services, it might be working out a strategy to eliminate bleeding segments. Earlier, IDC and Gartner revealed that there has been a steep decline in PC shipments, which probably affected Microsoft’s PC business.
After the latest Microsoft job cuts announcements, shares of the company fell by nearly 3%.
Are tech companies laying off?
It is no secret that 2022 has been a harsh year for tech investors as tech stocks plunged worse than expected. Companies have started pulling back on expansion plans as rising inflation and unfavorable economic conditions persist.
While Europe struggles with an impending energy crisis and fears of a recession, tech companies in the US have started reading the signs and preparing for a bearish market. Economists told Bloomberg that they believe headline inflation rose by nearly 8.8% last month, signaling a distressing few months ahead.
Amongst tech companies that have recently laid off staff, one of the most trending ones is Twitter. Amidst the acquisition battle with Elon Musk, Twitter recently let go of staff from its talent acquisition team. Netflix slashed jobs citing over-hiring during periods of rapid growth.
Tesla recently shut its San Matteo office, laying off more than 200 employees, as the electric carmaker moves ahead with plans to layoff about 10% of its salaried staff. CEO Elon Musk previously stated that he has a “super bad feeling” about the economy.
Meanwhile, Google’s parent company, Alphabet Inc. announced on July 12 that it will slow the pace of hiring and investments through 2023. In an internal email to employees, CEO Sundar Pichai stated, “Like all companies, we’re not immune to economic headwinds.” He went on to add, “Because of the hiring progress achieved so far this year, we’ll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities.” The company will, however, continue to hire for engineering, technical, and other critical roles.
