Satya Nadella, CEO of Microsoft, announced that as the company moved to focus forward, Microsoft is laying off 10,000 workers.
In the announcement, Satya Nadella expressed confidence that the organization will emerge stronger and more competitive from the decision “difficult but necessary”. It’s unclear exactly which departments are affected, but Microsoft made clear the redundancies were a result of it reprioritizing different areas of the business and that it would still be hiring in “key strategic areas”.
“These decisions are difficult, but necessary. They are especially difficult because they impact people and people’s lives – our colleagues and friends.”
Approximately 10,000 jobs, representing less than 5% of Microsoft’s workforce, will be eliminated by the end of the third quarter of the fiscal year 2023. “We will treat our people with dignity and respect, and act transparently,” said Nadella. “These decisions are difficult but necessary. They are especially difficult because they impact people and people’s lives – our colleagues and friends.”
Nadella also said the layoffs would force Microsoft and its employees to change their minds to meet the industry’s challenges. “When I think about the start of 2023, it’s showtime – for our industry and for Microsoft,” he said.
“As a company, our success must be aligned to the world’s success. That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from.”
Prior to announcing these layoffs, Microsoft implemented a policy of unlimited time off. Any unused vacation time at Microsoft will be paid out in April, and supervisors can agree to unlimited “discretionary time off” in the same month. Reactions to the policy have been mixed, with some employees appreciating its flexibility and others complaining that it offers no guarantees.
The news comes after Nadella said at the World Economic Forum in Switzerland that Microsoft is trying to buy Activision Blizzard to better compete with bigger players in the market such as Sony and Tencent. As detailed in The Wall Street Journal, “Being a No. 4 player trying to add some content and create more opportunity for more publishers, more gamers to be able to enjoy–I mean if you believe in competition, you should believe in this deal,”
Nadella hinted that companies like Microsoft would struggle over the next two years, and these latest cuts are an example of that. As the tech industry adapts to the ever-changing economic climate, layoffs and adjustments are inevitable, but the scale seen in recent months from Microsoft, Amazon, Meta, etc. is new, especially after years of tech flying high.