Microsoft joins other major technology companies that have decided to make massive layoffs in recent months. The company notified employees that it will eliminate 10,000 workers -nearly 5% of its workforce- in response to what it described as "macroeconomic conditions and changes in customer priorities."
The technology company stated that some of the layoffs would begin immediately and others would take place before the end of its third fiscal quarter. CEO Satya Nadella said in an email to employees that "while we are eliminating roles in some areas, we will continue to hire in key strategic areas."
We are allocating our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas. These are the kind of tough decisions we have made throughout our 47-year history to remain a major player in this industry that is unforgiving to anyone who does not adapt to platform changes.
The company will allocate US$1.2 billion(1.2 billion) to carry out the cuts.
A "new computing platform"
Nadella insisted on the importance of building a "new computing platform" using advances in artificial intelligence. He stated that customers now want to "optimize their digital spend to do more with less" so at the company they must make "changes to the hardware portfolio."
"Each of these large tech workforce reductions, itself a response to a weakening economy, puts more pressure on the rest of the industry to cut costs," Axios noted.
Microsoft joins a growing list of major tech companies that have recently cut staff, a list that includes Amazon, Meta, Twitter and Snapchat, among others.