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Microsoft announces it will shed 10,000 jobs by end of September

Microsoft CEO Satya Nadella informed Microsoft workers Wednesday that 10,000 of them are to lose their jobs. File Photo by Keizo Mori/UPI
Microsoft CEO Satya Nadella informed Microsoft workers Wednesday that 10,000 of them are to lose their jobs. File Photo by Keizo Mori/UPI | License Photo

Jan. 18 (UPI) -- Microsoft's chief executive warned the company's employees on Wednesday that 10,000 layoffs are coming by the end of third quarter.

Satya Nadella made the announcement in blog post on the company's website, saying some employees would given their notice Wednesday.

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Nadella blamed the decision on the need to align Microsoft's cost structure with its revenue and where it sees customer demand, but stressed the cuts represent only 5% of the company's 200,000-strong workforce.

''As we saw customers accelerate their digital spend during the pandemic, we're now seeing them optimize their digital spend to do more with less. We're also seeing organizations in every industry and geography exercise caution, as some parts of the world are in a recession and other parts are anticipating one,'' Nadella said.

''At the same time, the next major wave of computing is being born with advances in AI, as we're turning the world's most advanced models into a new computing platform.''

Nadella promised employees being let go would be treated with dignity, respect and in accordance with U.S. employment law or, for overseas hires, the laws of their respective countries.

He said the software company would take a $1.2 billion charge in the second quarter to cover costs related to severance liabilities.

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Microsoft's announcement came amid a wave of layoffs announced in the tech sector in recent months as inflation and recession worries hit consumer and corporate spending.

Earlier this month, Amazon became the latest tech giant to announce job cuts, confirming it will eliminate 18,000 positions.

Salesforce said it will reduce its staff by 10%, representing some 7,000 jobs, citing the economic downturn.

Facebook parent Meta announced 11,000 layoffs in November.

Last week Alphabet subsidiary Verily became the first of Google parent's divisions to announce job cuts, with plans to shrink its work force by 15%. Cuts will affect about 240 people.

The organization was formerly a division of Google X up until 2015.

Verily raised $1 billion in capital in September to expand its offering of data-driven, individually tailored healthcare products.

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