The company, which thus separates from just under 5% of its workforce, also plans to modify its portfolio of IT equipment and reduce the number of workspaces.
"These are the kind of tough choices we've made throughout our 47-year history to remain an important company in an industry that doesn't forgive those who don't adapt to platform changes," he said. Microsoft boss Satya Nadella in a letter to employees.
These savings measures will represent a charge of 1.2 billion dollars in the accounts for the staggered second quarter that the group must reveal on January 24.
Its turnover is expected to increase by only 2.7% over one year, a very low rate for the IT giant accustomed to double-digit growth.
While “customers accelerated their IT spending during the pandemic,” they are now looking to optimize it to “do more with less,” Nadella pointed out in the letter.
Businesses around the world are also being "cautious" about recession risks as advances in artificial intelligence shake up the sector, he says.
Microsoft had initially resisted thanks to the dynamism of remote computing (cloud), but companies have tended to limit their investments for several months for fear of a deterioration in the economy.
Not a surprise
Asked Wednesday about the layoffs during an intervention at the Davos forum, Satya Nadella pointed to the effects of inflation on economic growth and concluded: "no one can defy the laws of gravity".
Microsoft had already carried out two rounds of layoffs, one in July, which, according to the company, concerned less than 1% of the workforce.
The second took place in October and targeted less than 1,000 people, according to the Axios news site.
But other major groups in the tech sector have decided to reduce their workforce in recent months, like Amazon and Salesforce, which respectively announced in early January the dismissal of around 18,000 and 8,000 employees.
Meta, the parent company of Facebook and Instagram, also launched a social plan in November affecting 11,000 jobs.
The massive layoffs, however, come after a big wave of hiring in the tech sector during the pandemic, when companies tried to meet the explosion in demand for tech products for telecommuting and home entertainment.
Microsoft, which according to its site currently has 221,000 employees worldwide, had hired 75,000 since 2019, recalls Dan Ives, from Wedbush, in a note.
These dismissals are not a "surprise" in his eyes.
The group "will continue to spend strategically in the cloud, mergers and acquisitions (with the planned acquisition of video game publisher Activision, NLRD), betting on innovation (ChatGPT), and continue to accelerate on the innovation while reducing non-strategic areas (hardware, etc.)", predicts the analyst.
Microsoft is in particular on the verge, according to press reports, of injecting 10 billion dollars into the Californian start-up OpenAI behind the chatbot ChatGPT, which has caused a sensation since its launch at the end of 2021 by being able to respond with fluidity to various questions thanks to artificial intelligence, and the Dall-E 2 image generator.
© 2023 AFP