Microsoft to lay off around 10,000 employees, another blow in tech

The company, which is thus laying off just under 5% of its workforce, also plans to modify its portfolio of IT equipment and reduce the number of workspaces.

These savings measures will represent a charge of 1.2 billion dollars in the accounts for the staggered second quarter that the group is due to unveil 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.

In a letter to employees made public, Microsoft boss Satya Nadella explains that while "customers have accelerated their IT spending during the pandemic", they are now looking to optimize it to "do more with less".

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.

Other major groups in the tech sector have announced workforce reductions in recent months, like Amazon and Salesforce which announced in early January the layoffs of around 18,000 and 8,000 employees respectively.

Meta, the parent company of Facebook and Instagram, also launched a social plan in November affecting 11,000 posts.

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.

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 on cloud, mergers and acquisitions (Activision), innovation betting (ChatGPT), and continue to accelerate on innovation while reducing non-strategic areas (hardware, etc. )", predicts the analyst.

© 2023 AFP