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Microsoft lays off 10,000 employees

Microsoft CEO Satya Nadella speaks at the company’s Ignite Spotlight event in Seoul on November 15, 2022.

Seong Joon Cho | Bloomberg | Getty Images

Microsoft said Wednesday it was laying off 10,000 employees through March 31 as the software maker braces for slower revenue growth. The company is also taking a $1.2 billion charge.

Alphabet, Amazon and Selling power are among the technology companies that have reduced number of heads these last weeks. The contraction comes after demand for cloud computing and collaboration services picked up as businesses, government agencies and schools encouraged remote working to reduce covid exposure.

Rising prices prompted companies to become more cautious about their technology spending, hurting the outlook for tech stocks that have outperformed other market sectors year after year. Now Microsoft and its peers are taking stock. In July Microsoft said it will cut less than 1% of employees, and in October it will confirmed a further round of job cuts that would have affected fewer than 1,000 workers.

“I’m confident that Microsoft will emerge stronger and more competitive,” CEO Satya Nadella told employees in a published memo. on the Microsoft website. The move will reduce the number of Microsoft employees by less than 5%, and some employees will find out this week if they lose their jobs, he wrote.

Microsoft shares rose slightly at the US Open after the announcement.

Employees in the United States who are eligible for benefits will receive above-market severance pay, health care and vested stock for six months. and 60 days notice before they end their work, Nadella wrote.

Nadella recalled the business climate trends he described in recent months.

“While we’ve seen customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” he wrote. “We are also seeing organizations across all sectors and regions treading cautiously as some parts of the world are in recession and others are anticipating one.”

Earlier this month, Nadella indicated that the company may need to make adjustments.

“I think for us, as a global company, we’re not going to be immune to what’s happening in the macro,” he said in a interview with CNBC-TV18. “We’ll also need to get our own kind of operational focus to make sure our spending is in line with our revenue growth.”

Microsoft has call for Revenue growth of 2% in the second fiscal quarter, which would be the slowest rate since 2016.

Major layoffs aren’t an annual exercise for the 47-year-old Microsoft, but they happen occasionally. In 2017Microsoft laid off thousands of employees in a major reorganization of its sales unit. In 2014, following the acquisition of Nokia’s devices and services business, Microsoft cut 18,000 people.

The charge is for severance, equipment and the cost of consolidating leases, Nadella wrote.

“Each of us and every team across the company must raise the bar and outperform the competition to deliver meaningful innovation that customers, communities and countries can truly benefit from,” Nadella wrote. “If we achieve this, we will emerge stronger and prosper long into the future; it’s as simple as that.”

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