Microsoft Corp. has decided to cut thousands of jobs in wake of slower revenue growth. Moreover, the media reported that the software maker will cut jobs across its various divisions.
Microsoft will join a vast list of tech companies to have announce job cuts in past few months. Significantly, tech giants including Alphabet, Meta, Salesforce and Amazon has announced job cuts in recent weeks. The reduction in jobs is due to reduction in demand of cloud computing and related services. Previously, the demand for tech services rose when the COVID-19 struck in early 2020. However, with the resumption of normal services and ease in coronavirus restrictions, the demand for remote working tools reduced dramatically. Therefore, Microsoft also faced reduction in revenue and has joined the list of companies to cut jobs. Moreover, Microsoft’s decision is an indication that the tech jobs cuts may continue.
Reduction across the globe
Microsoft is targeting a reduction of 5% in it is existing workforce across the globe. This means that the tech company is laying off more than 10,000 roles worldwide. Moreover, the company may shed roles in human resource and engineering divisions. Previously, Microsoft announced in July that they will trim 1% of its existing workforce which is line with their normal annual attrition. In addition, the Microsoft announced an additional round of job cuts which affected 1,000 jobs. Furthermore, the software developer giant announced in December that it will give unlimited time off to all its U.S. based workers.
“I’m confident that Microsoft will emerge from this stronger and more competitive. “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less. We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.” CEO Satya Nadella told employees in a memo that was posted on Microsoft’s website.
Benefits for outgoing employees
A company’s official told CNBC that the workforce restructuring will impact teams across all geographies. However, sales and marketing and engineering jobs will bear major impact. However, U.S. employees will receive benefits and severance above the market. Moreover, employees will also receive six months of healthcare benefit and stock vesting for six months. In addition, the outgoing employees will also receive 60-day notice prior to job end.
The company’s CEO earlier hinted that Microsoft will bring structural changes.
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