Toni Dimaano Tech 01.17.2023 23:Jan PM EST

Microsoft To Lay Off Thousands Of Employees This Week, Reports Suggest

Within the next few days, Microsoft may announce massive layoffs, affecting a significant portion of its staff.

According to Sky News, there were 11,000 fewer employees overall, or about 5% of the company's 220,000 employees, affected by the layoffs.

The Job Cuts Is Effective Across Different Divisions

Although Microsoft does not specify a specific date for the anticipated cuts, a source familiar with the company's strategy predicts that layoffs will be announced prior to its quarterly reports next week.

Bloomberg also notes that a number of layoffs will start happening once announced in the company's engineering division tomorrow.

The job layoffs are reportedly much bigger than the 1% reduction in Microsoft's staff from the previous year.

It can be remembered that prior layoffs impacted employment in consulting as well as customer and partner solutions.

Microsoft is the most recent major technology company to experience economic turmoil, and the job cuts will occur just days after Microsoft introduced a new unlimited vacation policy.

With this, unused vacation balances for Microsoft employees will be paid out all at once in April, and supervisors will have limitless "Discretionary Time Off" to approve.

The layoffs also occur just a few weeks after Microsoft CEO Satya Nadella issued a warning about the two years of challenges the tech sector would face, The Verge writes.

Nadella also emphasized the necessity for tech firms to be effective while acknowledging that Microsoft was not immune to the global developments.

Microsoft Follows Chains Of Layoffs In The Tech industry

Microsoft declines to comment on rumors and speculation, a spokesperson for the company told Engadget.

At the end of June, Microsoft had 221,000 employees, up 40,000 or 22% from the same time the previous year.

However, the company's most recent earnings showed a five-year low in total sales growth, according to Geek Wire.

Executives stated that personnel growth would be "minimal" on the earnings call in October and predicted that trends like reduced PC demand and lower advertising spend would persist.

If the 11,000 figure is correct, that would be equivalent to the 11,000 employees that Meta cut last year as well.

Additionally, once the company has completed its extensive layoffs, it will fall short of the 18,000 positions that Amazon anticipates eliminating.

In any event, Microsoft appears to be following a familiar path since employment layoffs have previously occurred.

It can be remembered that during the first two years of the pandemic, the company's revenues skyrocketed, according to Engadget.

In an effort to take advantage of the situation, it went on a recruiting binge, adding 50,000 workers during that same time period.

However, Microsoft CEO Nadella only recently issued a warning about the need to tighten spending owing to deteriorating macroeconomic conditions this past October.

"We're focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way," Nadella told investors.