Microsoft is laying off 10,000 workers as job cuts in tech sector continue

Microsoft is cutting 10,000 workers, almost 5% of its workforce, in response to what it described as “macroeconomic conditions and changing customer priorities.”

The company said in a regulatory filing Wednesday that it had just notified employees of the layoffs, some of which are effective immediately.

The company said it would also be making changes to its hardware portfolio and consolidating its leased office locations.

The layoffs represent “less than 5 percent of our total employee base, with some notifications happening today,” Chief Executive Satya Nadella said in an email to employees.

“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella said. He emphasized the importance of building a “new computer platform” using advances in artificial intelligence.

He said customers who had accelerated their spending on digital technology during the pandemic are now trying to “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 wrote.

Other tech companies have also been trimming jobs amid concerns about an economic slowdown.

Amazon and business software maker Salesforce earlier this month announced major job cuts as they prune payrolls that rapidly expanded during the pandemic.

Amazon said it would cut about 18,000 positions. It’s the largest set of layoffs in the Seattle company’s history, although just a tiny fraction of its 1.5-million-strong global workforce.

Facebook parent Meta is laying off 11,000 people, about 13% of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce.

Nadella made no direct mention of the layoffs Wednesday during an appearance at the World Economic Forum’s annual meeting in Davos, Switzerland.

When asked by the forum’s founder, Klaus Schwab, what tech layoffs meant for the industry’s business model, Nadella said companies that boomed during the COVID-19 pandemic are now seeing “normalization” of that demand.

“Quite frankly, we in the tech industry will also have to get efficient, right?” Nadella said. “It’s not about everyone else doing more with less. We will have to do more with less. So we will have to show our own productivity gains with our own sort of technology.”

Schwab also asked Nadella about employee loyalty to Microsoft. Nadella said workers “should think of Microsoft as a platform to be able to connect with our mission to achieve what’s core to them. I think that’s the social equation.”