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Microsoft reportedly to lay off employees this week – GeekWire


Microsoft’s Redmond, Wash., campus. (GeekWire Photo)

Microsoft is gearing up to lay off more employees this week, according to multiple reports. The Seattle-area company will be the latest tech giant to trim workforce amid the broader economic downturn.

Bloomberg reported that Microsoft will cut jobs in several engineering divisions on Wednesday, and the cuts will be “significantly larger” than its other recent rounds of layoffs.

Sky News reported the company could cut around 5% of its total workforce, or more than 10,000 jobs. Business Insider said as much as one-third of Microsoft’s recruiting staff may be let go.

Microsoft in October laid off workers across multiple divisions. Axios reported that those cuts impacted under 1,000 people.

Microsoft also made a small number of job cuts in July, describing the move as part of a “strategic realignment” in specific areas of the company, and said it planned to keep growing its overall headcount.

A number of tech companies have cut jobs in recent months. Seattle-based Amazon is laying off 18,000 employees, or 5% of its corporate workforce. Salesforce, which has thousands of employees in the Seattle region, slashed 10% of its headcount. Several startups in the Seattle area are also conducting layoffs.

Microsoft had 221,000 employees as of June 30, an increase of 40,000 people or 22% from the same point the prior year. It was the largest annual increase in employment in Microsoft’s history, based on data tracked by GeekWire.

Total revenue growth for the company’s most recent earnings slowed to a five-year low. On the earnings call in October, executives projected trends such as weaker PC demand and lower advertising spend to continue, and said headcount growth would be “minimal.”

“In this environment, 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,” Microsoft CEO Sayta Nadella told analysts.

Microsoft reports is second fiscal quarter earnings next Tuesday. The company’s stock is down more than 20% in the past year.

Dan Ives, an analyst with Wedbush, wrote in a recent note that he remains bullish about Microsoft’s stock despite the “slowdown in cloud and a disaster PC market over the last few quarters.”

“We believe the shift to cloud is still less than 50% penetrated and represents a massive opportunity for Nadella & Co. going forward despite the dark storm clouds forming for FY23 in the uncertain macro backdrop,” Ives wrote.

We reached out to Microsoft about the reported cuts. A spokesperson said the company does not comment on rumors.


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