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Microsoft trims the sails

January 18, 2023.

Microsoft campus, Redmond, Washington.

Microsoft campus, Redmond, Washington. © iStock.

Microsoft confirmed it will lay off about 10,000 employees, or around 4.5% of its global workforce, by the end of Q3 of its 2023 fiscal year. In a filing with the Securities and Exchange Commission (SEC), Microsoft writes that this measure comes as a “response to macroeconomic conditions and changing customer priorities.” The staff cuts will affect a number of engineering divisions, including the mixed reality department working on Microsoft’s HoloLens gear. This decision corrects a course marked by years of expansion fueled by the effects of the pandemic, among other things. Microsoft's workforce has grown from 135,000 in 2019 to 150,000 in 2020, 166,000 in 2021 and 190,000 in 2022. “During the pandemic, there was rapid acceleration. I think we’re going to go through a phase today where there is some amount of normalization in demand,” said CEO Satya Nadella in an interview at the World Economic Forum in Davos, Switzerland. This is the third round of layoffs at Microsoft since July 2022, which affected several departments including customer and partner solutions and consulting. This decision is the result of an overall slowdown in the IT industry, where Amazon has let go of approximately 18,000 employees, Facebook/Meta 11,000 employees, Salesforce 7,000 employees, and HP 6,000 employees.

Ars Technica, Scharon Harding, “Microsoft to lay off 10,000 workers, blames decelerated customer spending.”