Microsoft is preparing for its biggest round of layoffs yet

Microsoft is preparing for its biggest round of layoffs yet . (Photo by Johannes EISELE / AFP)

As Microsoft prepares for its biggest round of layoffs, will there be more?

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  • Multiple reports suggest that Microsoft is planning to announce sweeping layoffs this week, targeting a few departments.
  • Sky News put the number of the cuts at approximately five percent of the company’s 220,000-person workforce or about 11,000 employees total.
  • Bloomberg did not share the scale of the layoffs but reported they would affect “a number of engineering divisions” and that they’re set to be “significantly larger” than other rounds of job cuts undertaken by Microsoft over the last year.

By now you’ve read multiple reports indicating that there would be layoffs within Microsoft Corp which is expected to take place as soon as this week. The update, which is so far a mere rumor, came after the technology giant decided to vacate their office space in Bellevue, United States on the grounds of ongoing evaluation of the software giant’s real estate portfolio.

The layoffs, according to multiple reports, are anticipated to be the tech giant’s biggest so far, following a slew of discharges announced last year. Earlier this month, Microsoft had also announced it would give all of its US-based employees unlimited time off under a new “Discretionary Time off” policy. Then came the latest update on the layoffs anticipated this week, first reported by Sky News, which put the number of the cuts at approximately five percent of the company’s 220,000-person workforce or about 11,000 employees total. 

Bloomberg, on the other hand, said it couldn’t find out the scale of the layoffs but reported they would affect “a number of engineering divisions” and that they’re set to be “significantly larger” than other rounds of job cuts undertaken by Microsoft over the last year. What is clear though is that if the 11,000 figure is accurate, Microsoft will seemingly find itself on a familiar trajectory as with Meta and Amazon.

Still, Microsoft waited longer than many other technology leaders to announce layoffs. For context, Meta too eliminated 11,000 jobs last year, while Amazon is expected to slash 18,000 positions once the retailer is done with its far-reaching layoffs. As with most tech giants, Microsoft too saw profits soar especially during the first two years of the pandemic, and it tried to capitalize on the moment by going on a hiring spree, adding 50,000 employees over that same time frame. 

By October 2022, Microsoft CEO Satya Nadella warned of imminent belt-tightening due to worsening macroeconomic conditions. “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,” he told investors and analysts at the time. More is expected from Nadella about Microsoft’s current position when the company announces its second-quarter earnings next week.

The reports by Reuters and Bloomberg indicated that Microsoft layoffs are expected to impact the workforce in engineering and HR departments. Frankly, layoffs in the tech sector have shown no signs of abating — with an average of 1,600 workers having gotten the pink slip every day in 2023 so far, according to tracking site Layoffs.fyi. Data aggregated by the site shows that 91 tech companies globally have already laid off 24,151 workers just 15 days into 2023.

The figure is basically about 15% of the 154,256 workers who were laid off by over a thousand tech companies in 2022. Overall, the mass layoffs within the tech sector is considered far from over and experts foresee it continuing well into this year and possibly 2024 as companies within the industry are still losing money.