(Bloomberg) – Microsoft Corp. plans to cut jobs in a number of engineering divisions on Wednesday, according to a person familiar with the matter, joining the ranks of tech giants that are scaling back as the industry braces for a prolonged drop in demand.
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The extent of the cuts could not be known, but the person, who asked not to be identified while discussing confidential matters, said the reduction will be significantly larger than other rounds at Microsoft over the course of the year. past year. These cuts affected less than 1% of the software giant’s workforce of more than 200,000 people.
Microsoft recently downsized in October and July, and eliminated vacancies and suspended hiring in various groups. While tech peers such as Amazon.com Inc., Meta Platforms Inc., and Salesforce Inc. have announced cuts by the thousands in recent months, Redmond, Wash.-based Microsoft has so far now taken more modest steps to deal with the deteriorating global situation. economic outlook and the possibility of a prolonged slowdown in demand for software and services.
A Microsoft representative declined to comment. The shares, which have fallen 23% over the past year, were little changed at $240.35 at the close in New York on Tuesday. Sky News earlier reported that the company planned to cut thousands of jobs, and Insider reported that Microsoft could cut its recruitment staff by up to a third.
Microsoft is expected to post a 2% sales gain in the fiscal second quarter when it reports results on Jan. 24. It would be the smallest increase in revenue since fiscal year 2017. Since then, Microsoft’s cloud computing business has fueled renewed growth. , but even that activity has begun to slow over the past year.
Yet the company waited longer than many other tech leaders to drastically cut staff. Cloud rival Amazon is laying off more than 18,000 employees, the biggest cut in its history. Facebook parent Meta announced widespread job cuts last fall, and beleaguered social network Twitter Inc. cut about half its workforce. Enterprise cloud software maker Salesforce laid off about 10% of its employees earlier this month.
Read a running list of tech companies planning layoffs
(Updates with closing stock price in fourth paragraph. An earlier version of this story corrected the fifth paragraph to reflect that the most recent period was the second fiscal quarter, not the third fiscal quarter.)
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