Microsoft announces 10,000 layoffs as jobs bloodbath in US accelerates

The Microsoft logo is pictured outside the headquarters in Paris, Jan. 8, 2021. [AP Photo/Thibault Camus]

Tech giant Microsoft announced Wednesday that it will lay off 10,000 workers, or 5 percent of its global workforce, as the wave job cuts in the US tech, banking and retail sectors accelerates.

Microsoft made its job cutting plan public the same day that Amazon began sending out layoff notices to 18,000 workers in the US, Canada and Costa Rica as part of its previously announced move to cut 6 percent of its global workforce.

Microsoft CEO Satya Nadella said the job cuts were needed due to the reduction in demand for computers, software and digital services and the growing global economic downturn. “We are aligning our cost structure with where we see demand,” he 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.” 

Bloomberg reported that the Redmond, Washington-based company would eliminate positions at several engineering divisions. The cuts will also hit the HoloLens military goggle division, Xbox Entertainment and Bethesda Game Studios and 343 Industries, the developers of popular video games Starfield and Halo. Some of those who lost their jobs were veterans who had been with Xbox for more than a decade, Bloomberg cited co-workers saying. Nearly 900 jobs are being cut in Washington state alone, according to a state employment filing. 

Nadella, whose net worth is estimated at $950 million, was a guest speaker at the World Economic Forum in Davos, Switzerland this week. He told the Wall Street Journal, “We in the tech industry will have to get more efficient—it’s not about everyone else doing more with less, we will have to do more with less. We will have to show our own productivity gains.” 

The job-cutting was hailed by Wall Street analysts after a year of declining share values, which has seen Microsoft’s market capitalization fall by 30 percent. “It was a rip-the-Band-Aid-off moment from Nadella and Microsoft, and we’re seeing it across tech,” Wedbush analyst Dan Ives told Yahoo Finance Live. “These companies were spending like 1980’s rock stars at a pace that was unsustainable.” 


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