Mass layoffs have hit Microsoft as it reportedly set to fire nearly 11,000 employees this week amid the global economic slowdown.
The maker of Windows and Office made this known on Wednesday becoming the latest tech company in the league of Amazon, Salesforce, and others to reduce workers over rising economic insecurity.
According to CNN, the company is taking a $1.2 billion charge in the fiscal second quarter that will result in a negative impact of 12 cents to earnings per share.
The reduction comes after demand for cloud computing and collaboration services rose as enterprises, government agencies, and schools encouraged remote work to reduce Covid exposure.
Microsoft’s Chief Executive Officer (CEO), Satya Nadella said at the World Economic Forum (WEF) in Davos, Switzerland.
Rising prices have encouraged companies to become more careful about technology spending, hurting prospects for the tech stocks that outperformed other market sectors year after year.
Now Microsoft and its peers are taking stock. In July Microsoft said it will trim less than 1% of employees, and in October it confirmed an additional round of job cuts that reportedly affected fewer than 1,000 workers.
“I’m confident that Microsoft will emerge from this stronger and more competitive,” Nadella told employees in a memo that was posted on Microsoft’s website.
The move will reduce Microsoft’s headcount by less than 5%, and some employees will find out this week if they’re losing their jobs, he wrote.
“We’re living through times of significant change, and as I meet with customers and partners a few things are clear.
“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less.”
“These decisions are difficult but necessary,” Nadella added.