Thousands of job cuts are expected in human resources and
engineering divisions on Wednesday. The layoffs would be the latest in the US
technology sector, where companies including Amazon and Meta have announced
retrenchment exercises in response to slowing demand and a worsening global
economic outlook.
The company had 221,000 full-time employees, including
122,000 in the US and 99,000 internationally, as of June 30, according to
filings.
Microsoft is under pressure to maintain growth rates at its
cloud unit Azure, after several quarters of the downturn in the personal
computer market hurt Windows and devices sales, reported Reuters.
It had said in July last year that a small number of roles
had been eliminated. In October, news site Axios reported that Microsoft had
laid off under 1,000 employees across several divisions.
Shares of Microsoft, which is set to report quarterly
results on January 24, were marginally higher in late afternoon trading,
reported Reuters.
Microsoft's move could indicate that the tech sector may
continue to shed jobs. Microsoft is the latest big tech company to face a
challenging economy, and the job cuts will come just days after Microsoft
implemented a new unlimited time off policy.
Microsoft employees that have an unused vacation balance
will get a one-time payout in April, and managers will be able to approve
unlimited "Discretionary Time Off."
The cuts also come just weeks after Microsoft CEO Satya
Nadella warned of two years of challenges ahead for the tech industry. In an
interview with CNBC, Nadella admitted Microsoft wasn't "immune to the
global changes" and spoke of the need for tech companies to be efficient.
"The next two years are probably going to be the most
challenging," said Nadella. "We did have a lot of acceleration during
the pandemic, and there's some amount of normalisation of that demand. And on
top of it, there is a real recession in some parts of the world."