The computer and software giant announced Wednesday that it would begin layoffs of 10,000 employees—less than 5% of its workforce. Microsoft is just the latest in the reversal of tech companies reducing staff and cutting costs after the pandemic hiring boom.
In a statement to employees, CEO Satya Nadella said the company would refocus on strategic initiatives including increased investment in OpenAI, the parent company of ChatGPT.
“The next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform,” said Nadella.
Since 2019, Microsoft has added 75,000 people to its workforce, but in October last year, the company reported the slowest growth in five years. Worsening inflation, recession fears, and stiffer competition across the tech industry have fueled similar layoffs in tech companies since the end of Q4 2022.
As part of its strategic shift, Microsoft will continue hiring in strategic departments, including AI, despite these layoffs. Nadella also noted that Microsoft would make changes in its hardware portfolio and consolidate office leases as it seeks to cut costs.
Microsoft is not the only technology company to announce layoffs this month. Software company Salesforce said it plans to lay off 8,000 workers this month, and Amazon is expected to begin a round of layoffs this week as it prepares to reduce its corporate workforce by 18,000.
