Microsoft to Lay Off 10,000 Workers as It Looks to Trim Costs

Customers are seeking “to do more with less,” Mr. Nadella said. “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,” he added.

The changes, including severance and other restructuring expenses, will cost $1.2 billion, Mr. Nadella said. In a regulatory filing, Microsoft said some of the costs would come from consolidating office leases, as well as “changes to our hardware portfolio.” Microsoft makes the Surface line of laptops and tablets, and demand for personal computers has fallen sharply from the pandemic highs, when companies and families purchased laptops to work and study from home.

In October, Amy Hood, the company’s finance chief, told investors that the slowdown in consumer PC sales that started in September would continue through at least June.

Microsoft is scheduled to report its quarterly earnings on Tuesday.

Mr. Nadella said the company would continue to hire in strategic areas, and called advances in artificial intelligence “the next major wave of computing.”

The company has been pursuing several expensive bets, including potentially putting another $10 billion into its investment in OpenAI, which makes the explosively popular ChatGPT artificial intelligence system, and a $69 billion acquisition of the video game maker Activision that is facing challenges globally by antitrust regulators.

Other tech giants have also been reducing costs after several years of breakneck expansion. Amazon began what is expected to be a huge round of layoffs on Wednesday, as part of its plans to reduce its corporate work force by about 18,000 jobs.

“The exit out of Covid this past year was challenging,” Doug Harrington, who heads Amazon’s retail and operations business, wrote Wednesday morning in a message to staff obtained by The New York Times.

Article source: https://www.nytimes.com/2023/01/18/business/microsoft-layoffs.html