Microsoft has announced 10,000 redundancies as part of plans to cut its spending amid economic uncertainty.
In a note to employees on Wednesday (18 January) Microsoft CEO Satya Nadella said the decision had been driven by reduced consumer spending after the boom it saw during the pandemic, as well as recessions or anticipated recessions in many of the markets it operates in.
Nadella added that the “next major wave of computing is being born with advances in AI”. Microsoft is an investor in OpenAI, the company behind the ChatGPT chatbot.
“We will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs,” he said in a blog post.
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The redundancies represent less than 5% of its global workforce, with the first wave of redundant employees notified yesterday. It is not yet known how many Microsoft jobs in the UK will be lost, but all job cuts are expected to be completed by the end of March.
The company is the latest tech giant to announce mass redundancies, following similar announcements by Amazon, Meta and Twitter in recent months.
It follows some headcount reductions at Microsoft last year. In October, US-based news site Axios reported that the company had laid off fewer than 1,000 employees across several divisions.
Andrew Moore, senior HR consultant at employment law consultancy WorkNest, said Microsoft was a key example of a company that boomed during the pandemic but was now having to scale back.
“We’ve also seen this happen already with the likes of Meta and Amazon who have made a substantial number of redundancies. They are likely not to be the only ones either. Research of our own at WorkNest found that over two-fifths of employers who are looking to make cost savings in their workforce are planning to restructure or make redundancies in the next 12 months amid rising costs,” said Moore.
The latest labour market figures from the Office for National Statistics this week showed that redundancies increased to 3.4 per thousand employees from September to November 2022, which is still low.
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