Business

Microsoft to cut thousands of jobs in latest layoff by tech giant | Business news

Microsoft is preparing to cut thousands of jobs in the latest move by one of the world’s biggest technology companies to reduce its workforce in the face of a slowing global economy.

Sky News has learned that the US software giant could announce plans to remove a significant number of posts worldwide within days.

Microsoftwhich employs more than 220,000 people, including 6,000 in the UK, is said to be considering cutting roughly 5% of its workforce, which, if true, would amount to approximately 11,000 jobs.

That figure could not be verified on Tuesday night, and one analyst suggested Wall Street would be surprised if the number was not higher.

It was also unclear whether or how many UK-based positions may be affected.

The company, which has made big bets on the growth of cloud computing and now has a market value of $1.78 trillion, is scheduled to report second-quarter earnings next week.

If completed, the layoff announcement will likely come before Satya Nadella, Microsoft’s chairman and CEO, reports to investors on Jan. 24 about its financial performance.

In recent weeks, a host of big tech companies have taken the ax, with Amazon this month revealing plans to cut 18,000 jobs, or about 6% of its workforce.

Salesforce, the cloud software provider, said it would cut 8,000 jobs, while Meta, the owner of Facebook, is cutting its workforce by roughly 11,000 roles.

Big tech companies have been forced to respond to signs of a global economic slowdown, with many recruiting tens of thousands of additional employees during the pandemic.

Microsoft CEO Satya Narayana Nadella
The painting:
Satya Nadella will brief investors on Microsoft’s financial results next week

Under Elon Musk’s ownership, Twitter also moved to cut thousands of jobs, while 6,000 also went to PC maker HP.

Microsoft warned in October of a slowdown in its cloud computing business, an acknowledgment that large corporate clients are rethinking spending in response to economic challenges.

“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” Nadella said in October.

“In this environment, we are focused on helping our clients do more with less while investing in areas of secular growth and managing our cost structure in a disciplined manner.”

The company has been transformed under Mr Nadella’s leadership, although its earnings have been hampered by the strength of the dollar in recent quarters.

It is also fighting a battle with regulators to win approval for a £56bn takeover of Call Of Duty maker Activision Blizzard.

Last month it surprised investors by acquiring a £1.5bn stake in the London Stock Exchange owner as part of a long-term partnership in cloud computing.

Microsoft expects to generate $5 billion in revenue over the life of the alliance.

Ahead of next week’s earnings, Guggenheim downgraded Microsoft shares to a sell rating, saying the numbers “may disappoint investors.”

“While most investors see Microsoft as a big stable company that can weather any storm, it has vulnerabilities, some of which could be exacerbated by this macro[economic] slowdown,” they wrote.

In response to an inquiry from Sky News, a spokesperson said Microsoft “does not comment on rumors or speculation”.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button