Citing growing recession fears, Microsoft (MSFT) – Get a free report CEO Satya Nadella told employees the software giant was making the “difficult” decision to cut 10,000 jobs.
Nadella told employees at a business on January 18. blog post that the Redmond, Washington company co-founded by Bill Gates was cutting 5% of its workforce in response to the global economic slowdown.
“These decisions are difficult, but necessary,” Nadella said. “They are especially difficult because they impact people and people’s lives: our colleagues and friends.”
While businesses increased their digital spend during the pandemic, he said, they are now doing more with less as “organizations in all industries and geographies exercise caution as some parts of the world are in a recession and other parts the anticipate”.
“At the same time, the next big wave of computing is being born with advances in AI, as we are turning the world’s most advanced models into a new computing platform,” Nadella said.
Although the company is cutting positions in some areas, Microsoft will continue to hire “in key strategic areas.”
Nadella says it’s ‘Showtime’ for Microsoft
Nadella said the company “will treat our people with dignity and respect and act with transparency.”
“When I think about this moment in time, the beginning of 2023, it’s show time, for our industry and for Microsoft,” Nadella said. “As a company, our success must be aligned with global success.
“That means each of us and every team in the company must raise the bar and outperform the competition to deliver meaningful innovation that customers, communities and countries can truly benefit from,” he added.
In response to economic concerns, technology companies are cutting costs, including through waves of job cuts.
Facebook Parent Metaplatforms (GOAL) – Get a free report cut 11,000 jobs, for the first time since the social media giant started in 2004. E-commerce giant Amazon (AMZN) – Get a free report said it would eliminate more than 18,000 jobs.
Earlier this month, the world’s largest enterprise software company, Salesforce (CRM) – Get a free reportit also unveiled plans to cut around 10% of its global workforce amid a restructuring strategy under independent CEO Marc Benioff.
Microsoft is scheduled to publish earnings for the three months ending in December, its fiscal second quarter, on January 23.
