Microsoft to announce big layoffs, according to multiple reports | CNN Business

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Microsoft ( MSFT ) could announce thousands of job cuts on Wednesday, according to multiple news reports, potentially becoming the latest technology company to shed its workforce as the global economy slows.

Sky News, without citing sources, reported that the redundancies would affect approximately 5% of the company’s workforce. Microsoft employs 221,000 people worldwide, including 122,000 in the United States.

The software company plans to cut jobs in several engineering divisions, according to Bloomberg, which quoted a person familiar with the matter. The Wall Street Journal, also citing a person familiar with the matter, said the layoffs could be announced as early as Wednesday. Microsoft declined to comment on the reports.

Several tech companies have made deep cuts to their workforce since the start of the year as inflation weighs on consumer spending and rising interest rates squeeze funding. Demand for digital services during the pandemic has also declined as people return to their offline lives.

Amazon ( AMZN ) announced it plans to lay off 18,000 people and Salesforce said it will cut 10% of its workforce. Facebook (FB) parent Meta also recently announced 11,000 job cuts, the largest in the company’s history. In October, Axios reported that Microsoft had laid off fewer than 1,000 employees from various divisions.

Tech CEOs, from Meta’s Mark Zuckerberg to Salesforce’s Marc Benioff, have blamed themselves for over-hiring early in the pandemic and misunderstanding how a surge in demand for their products would cool once it did. reduce Covid-19 restrictions.

While the overall job market remains tight, layoffs in the tech sector have increased at a surprising rate. A recent report by outplacement firm Challenger, Gray & Christmas found that tech layoffs increased 649% in 2022 compared to the previous year, compared to just a 13% increase in job cuts from work in the general economy during the same period.

Microsoft will announce second-quarter earnings on January 24. The software company’s Azure cloud computing business drove revenue growth in the three months to September as sales in its personal computing division fell slightly.