PremiumMicrosoft said that it will axe 10,000 employees, almost 5% of its workforce, by the end of third quarter of fiscal 2023 over poor economy.
Tech giant Microsoft on Wednesday said that the company will continue to hire in key strategic areas while it will eliminate roles in some areas as the company looks to reduce its workforce.
Microsoft said that it will axe 10,000 employees, almost 5% of its workforce, by the end of third quarter of fiscal 2023 over poor economy.
"We will continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas. These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts," said Microsoft Chief Executive Officer Satya Nadella in a blog.
Microsoft will spend $1.2 billion in Q2 to severance costs, cost of lease consolidation.
"As such, we are taking a $1.2 billion charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces," he added.
Microsoft said, "First, we will align our cost structure with our revenue and where we see customer demand."
The company said that the employees who are laid off will have 'full support during these transitions.'
It said that US based employees will receive benefits, including above-market severance pay, healthcare coverage for six months, vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination
"I want to extend my deepest thanks and gratitude to everyone who has contributed to Microsoft up to this point and to all of you who will continue to contribute as we chart our path ahead. Thank you for the focus, dedication, and resilience you demonstrate for Microsoft and our customers and partners each day," said Microsoft CEO Satya Nadella.