Microsoft Corporation has said that it will make job cuts that will affect about 5% of its workforce before the end of March.
In the memo sent out by the company, the CEO, Satya Nadella, said some of those that will be affected by the job cuts will be notified today, while the rest will be notified, and the workforce reduction concluded before the end of March. Nadella said this job cuts is necessary due to the macroeconomic conditions and changing customer priorities that the company is experiencing, adding that the changes will result in the reduction of its overall workforce by 10,000 jobs through the end of FY23 Q3.
“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 wrote in the memo.
This is not the first time Microsoft is going on a layoff. Last year, the company underwent a couple of smaller layoffs, with this recent one being the largest of the series of layoffs.
In recent times, job cuts have been a recurring trend among big tech companies. Companies like Meta, Salesforce, Twitter, and a couple of others have been fingered in the workforce reduction, with Amazon having the highest number of 18,000 job cuts.
Speaking in the severance package for laid off workers, Microsoft said affected employees will receive an above-market severance pay, healthcare coverage for six months, continued vesting of stocks for six months, career transition services, and 60 days’ notice prior to termination.
The announcement of the job cuts come weeks after the CEO, Nadella, said in an interview with CNBC that Microsoft and other software companies will face two years of economic challenges as the companies are not “immune to the global changes.”
Meanwhile, about a day ago, Microsoft implemented a new unlimited time off policy. With this 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 policy, however, has had mixed reception internally at Microsoft, with some employees favoring the flexibility, while others raise eyebrows about a lack of guaranteed days and benefits.
Although, Microsoft is going forward with the layoffs, the company is also planning to hire hands in strategic areas.
“We will continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas,” Nadella noted.