Microsoft confirms 10,000 job cuts in memo to staff

January 18, 2023

Microsoft could soon announce major jobs cuts — across as much as 5% of its global workforce, according to news reports.

SkyNews reports that Microsoft is considering axing about 5% of its 220,000 global workforce, equating to around 11,000 employees.

According to the Wall Street Journal, Microsoft could announce the layoffs as early as Wednesday morning, a week ahead of its quarterly earnings update.

Microsoft will cut jobs from a number of engineering divisions on Wednesday, citing a source who said the cuts would be significantly larger than the roughly 1% the company cut across July and October last year, Bloomberg reports.

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Microsoft’s job cuts follows similarly sized cuts at Amazon, which announced 18,000 job cuts this month, and Salesforce, which cut 8,000 roles. Both companies had hired aggressively in the early stages of the pandemic. Facebook parent Meta also slashed 11,000 roles in November — its first ever reductions since Facebook launched in 2004. And Twitter under Elon Musk has cut its workforce by over 3,000, representing half of its former headcount.

Microsoft Cloud and Azure has been its top-performing business unit in recent years, consistently seeing around 30% growth in revenues. However, Windows revenues have been hit by a strong US dollar and shrinking PC sales as consumers and businesses tighten their belts amid high inflation. Windows OEM revenues declined 15% last quarter.

Thanks to ChatGPT capturing the world’s attention, one bright spot for Microsoft is its $1bn investment in OpenAI, which has translated into the now generally available Azure OpenAI Service. Microsoft will offer ChatGPT to customers in addition to access to GPT-3.5, Codex, and DALL•E 2.

Microsoft is reportedly in talks to take a $10bn stake in OpenAI, which would give it a 49% share of the research and development company valued at $29 billion.

The 11,000 jobs potentially at risk at Microsoft aren’t its biggest cuts. In July 2014, when it had a headcount of 130,000, the company culled its workforce by 18,000, of which 12,500 were from the Nokia devices team.