Around 10,000 jobs are being axed at Microsoft as the software giant becomes the latest US tech firm to announce hefty staff cuts in the face of an economic downturn.
18 January 2023

Microsoft axing 10,000 roles in latest US tech jobs cull

18 January 2023

About 10,000 jobs are being axed at Microsoft as the software giant becomes the latest US tech firm to announce hefty staff cuts in the face of an economic downturn.

The group said the cuts – almost 5% of its workforce – were being made in response to “macroeconomic conditions and changing customer priorities”.

It plans to complete the job losses by the end of September.

The company said it had notified employees of the layoffs, some of which begin immediately.

It declined to give a breakdown of cuts per country or give details on what the impact would be on the UK.

Microsoft has around 6,000 workers and six main offices in the UK – its Reading UK headquarters and sites in Cambridge, Edinburgh, Enfield, Manchester and Paddington.

The company said it will also be making changes to its hardware portfolio and consolidating its leased office locations.

It will take a charge of about 1.2 billion US dollars (£976 million) in the second quarter from the actions.

Details of the job cuts follow reports on Tuesday over the planned layoffs and come after Microsoft already slashed some roles last year, although numbers were not confirmed at the time.

Microsoft joins a raft of rivals, such as Amazon and Facebook owner Meta, in trimming their workforces on fears of a slowdown in demand as the US and global economy slows.

Satya Nadella, chief executive of Microsoft, said in an online blog to employees: “While we are eliminating roles in some areas, we will continue to hire in key strategic areas.”

He said customers that were accelerating their spending on digital technology during the pandemic are now trying to “optimise their digital spend to do more with less”.

“We’re also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” Mr Nadella wrote.

Staff eligible to US benefits that are being laid off will be offered a redundancy package including “above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination” according to the company.

The group said impacted staff outside the US will have benefits that “align with the employment laws in each country”.

Mr Nadella added: “We know this is a challenging time for each person impacted.

“The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.”

Online retail titan Amazon is also expected to give further details soon of where its planned job cuts would go after revealing last week that 18,000 roles were being axed – the biggest cull in its history.

Business software maker Salesforce also announced major job cuts earlier this month, while Facebook owner Meta is laying off 11,000 people and Twitter’s new boss, Elon Musk, has slashed the firm’s workforce since taking it over.

The best videos delivered daily

Watch the stories that matter, right from your inbox