One of the largest tech firms in the world, Microsoft, is getting ready to lay off thousands of employees as a result of the weakening global economy.
According to technology press reports, the US software giant may soon reveal intentions to delete a sizable number of posts globally.
Microsoft, which has more than 220,000 employees worldwide, including 6,000 in the UK, is rumoured to be considering eliminating about 5% of its workforce, which, if true, would represent almost 11,000 jobs.
It was impossible to confirm that number on Tuesday night, but according to one analyst, Wall Street would be shocked if it wasn’t higher.
Additionally, it was unknown if or how many positions with UK locations may be impacted.
The business, which has made significant bets on the development of cloud computing and has a current market value of $1.78 trillion, is expected to disclose second-quarter earnings next week.
If finalised, a staff reduction announcement would likely be made before Satya Nadella, the chairman and CEO of Microsoft, provides investors with an update on the company’s financial performance on 24 January.
A number of major internet firms have wielded the knife in recent weeks, with Amazon announcing intentions this month to eliminate 18,000 positions, or approximately 6% of its workforce.
The cloud computing company Salesforce announced it would eliminate 8,000 jobs, and Facebook’s owner, Meta, is laying off about 11,000 employees.
With many having hired tens of thousands more workers during the pandemic, many technology corporations were forced to react to warnings of a worldwide economic slowdown.
Twitter has also taken steps to eliminate thousands of employees while HP has also shed 6,000 workers.
Microsoft acknowledged that major corporate clients were reevaluating expenditure in reaction to economic concerns when it issued a warning in October about a downturn in its cloud computing business.
Digital technology is the ultimate tailwind in a world with growing headwinds, Mr. Nadella declared in October.
“In this environment, we’re focused on assisting our clients in achieving more with fewer resources, while investing in secular growth areas and managing our cost structure in a disciplined manner,” the company said.
Under Mr. Nadella’s direction, the corporation has undergone a transformation, but recent dollar strength has hurt its earnings.
Additionally, it is battling regulators to win their support for a £56 billion acquisition of Call of Duty creator Activision Blizzard.
In a long-term cloud computing collaboration this month, it startled investors by acquiring a £1.5 billion share in the company that owns the London Stock Exchange.
Over the course of the partnership, Microsoft anticipates earning $5 billion in income.
Microsoft’s stock was lowered to a sell recommendation by analysts at Guggenheim ahead of its earnings report next week, which claimed that the results “may disappoint investors.”
Despite the fact that the majority of investors view Microsoft as a sizable, stable company that can weather any storm, they noted that the company has vulnerabilities that may be made worse by the macro[economic] slowdown.