Microsoft announce layoffs what they are going to do massively, where there are 10 thousand of their employees who are affected.
In his memo, Microsoft CEO Satya Nadella said Microsoft would make changes that would have an impact on reducing the number of its employees by up to 10 thousand by the end of Q3 of the 2023 fiscal year.
Currently, only around 800 employees are affected by the planned layoffs, but by the end of March it is certain that the number will reach 10,000 people. Despite the layoffs, Nadella ensured that Microsoft would continue to recruit new employees for key strategic positions.
The employees who were laid off were promised a higher severance pay than usual, six months of health insurance, career transition services, shares and 60 days’ notice.
Currently, in total, Microsoft has more than 220 thousand employees, and this means that the number of layoffs is around 5% of that number. This figure is also far greater than Microsoft’s previous biggest layoffs, namely 1% of total employees in 2022.
According to sources quoted by The Verge, most of the employees affected by the layoffs are currently in the division working on HoloLens and the Microsoft Edge browser, as well as the marketing team, 343 Industries, and game developer Bethesda.
In the same memo, Nadella also said that Microsoft spent USD 1.2 billion in Q2 2023 related to severance pay, changes to the hardware portfolio, and consolidation costs for building leases because Microsoft will create a denser workspace.
For information, in the 2022 fiscal year, Microsoft received revenue of USD 198 billion and operating income of USD 83 billion, quoted detikINET from The Verge, Thursday (19/1/2023).
Oh yes, in its history, Microsoft has twice carried out massive layoffs with thousands of employees affected. Namely, in 2009, 5,800 employees were laid off, and in 2014, the number of layoffs reached 18,000.
However, it should be noted, the layoffs in 2014 were carried out after Nadella was appointed CEO, and the majority of those affected by the layoffs (around 12,500 people) were former employees of Nokia, which at that time had just been acquired by Microsoft.