Microsoft could layoff 11,000 employees: Reports

Just months after laying off nearly 1,000 staffers across its Xbox and Edge divisions, Microsoft is expected to carry out another round of layoffs in the coming weeks, impacting 5% of its workforce, according to a Sky News report.

About 11,000 employees out of Microsoft’s 220,000-strong workforce are expected to bear the brunt of the decision, the report claimed, while citing a Wall Street analyst who predicted that the number could be higher.

Microsoft has declined to comment.

A separate Bloomberg report citing sources claimed that the fresh round of layoffs are being planned in response to the expected slump in demand due to macroeconomic conditions and is likely to impact Microsoft’s engineering teams.  

Microsoft had reported its slowest growth in five years for the first quarter of its fiscal 2023, due largely to a strong US dollar and an ongoing decline in personal computer sales, causing net income to fall by 14% to $17.56 billion from this time last year.

In the previous quarter, the company’s net income was relatively flat at $16.7 billion, at a much more modest increase of just 2%.

The Windows maker has put hiring freezes in place across different divisions and new job offers are now required to have top executive-level clearance, according to a report from The Business Insider.

The new offers being made are 30% less in compensation as compared with previous offers made for similar positions at the company, the report claims.

If the reports are accurate, Microsoft’s fresh layoffs will be very similar in magnitude and nature to the layoffs at Meta, Amazon and Salesforce, which have all cited macroeconomic concerns as the main reason behind the strategy to downsize heavily.

Large technology companies have continued to downsize since August last year through January.

In just the first 18 days of 2023, 104 technology companies have laid off over 26,000 employees, data collated by layoffs.fyi showed. Last year, the portal data shows that 1,021 companies had let go of 154,036 employees.