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Microsoft will reportedly lay off 5 percent of its workforce on Jan. 19 before releasing its quarterly earnings next week. The edge reported.
With a workforce of more than 220,000 employees, it is estimated that about 10,000 employees will be laid off.
Bloomberg reported that the layoffs will be aimed at Microsoft’s engineering department.
In 2022, Microsoft cut 1 percent of its workforce, impacting mostly positions in consulting and customer and partner solutions.
Bloomberg reported that the cuts will be “significantly bigger” this year.
Singapore cuts unclear
It is unclear whether Singapore-based positions will be affected.
Mothership contacted Microsoft for comment.
It declined to comment on the matter.
A statement from Microsoft said, “Microsoft does not comment on rumors or speculation.”
Prepare for slump ahead
The Entrepreneurial Age reported that Microsoft is expected to post a 2 percent revenue increase in its fiscal third quarter when it reports earnings on Jan. 24, which will mark its slowest revenue increase since fiscal 2017.
Microsoft is the latest tech giant to scale back due to a slump in demand and an expected global recession.
In an interview with Microsoft, Satya Nadella, CEO of Microsoft, warned of two years of challenges for the tech industry TBEN a few weeks ago.
“The next two years are probably going to be the most challenging,” Nadella said.
“We had a lot of acceleration during the pandemic and that demand has normalized somewhat. Moreover, there is a real recession in some parts of the world.”
In 2022, Twitter announced a massive job cut during the Elon Musk acquisition, cutting nearly 50 percent of its workforce.
Twitter’s Singapore office was not spared, with staff laid off from various departments ranging from engineering, sales and marketing teams.
The trend of downsizing tech giants can be attributed to the “unusual and uncertain macroeconomic environment” as characterized in a statement from Amazon, a company that has laid off 18,000 employees as of January 2023.
During the pandemic, technology companies were quickly hired to accommodate the huge demand for remote solutions.
Coupled with rising interest rates under the control of the US Fed and a predicted slump in demand, companies have resorted to cutting employment to stay afloat.
Top image via Turag Photography on Unsplash