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In July, Microsoft indicated that it could lay off less than 1% of its workforce as part of a structural adjustment exercise.
A few months after Microsoft slowed down hiring and suggested layoffs of less than 1% of its workforce, the company has reportedly let go of nearly 1,000 employees. Those relieved from duties include members of multiple divisions, including Xbox console gaming, Microsoft Strategic Missions and Technology organization, and everything in between.
According to some of the affected workers who spoke with Insider, Microsoft also laid off employees hired as recently as a month ago. The news is a stark reminder of the ongoing layoffs in tech that have so far impacted 14,000 highly skilled employees from U.S.-based tech startups alone, according to Hirect.
Data from Crunchbase suggests that overall, more than 44,000 U.S-based tech workers have been handed the pink slip as of mid-October 2022. The flux stems from global efforts to cut down expenses as revenues and profitability decline due to decreased spending as early signs of an economic recession mount.
“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” a Microsoft spokesperson told multiple agencies. “We will continue to invest in our business and hire in key growth areas in the year ahead.”
In the four preceding quarters, Microsoft’s year-over-year revenue continued to increase (both in absolute and percentage terms). However, the growth rate – still positive – has declined considerably (as shown in the table below).
Period
YoY % Growth
Q3 2021 (FY22 Q1)
21%
Q1 2022 (FY22 Q3)
1.21%
See More: Microsoft Partners With Meta to Bring Teams, Microsoft 365, and Other Apps to Meta Quest Devices
Slowing demand for computing and storage resources has led to a slight decline in cloud revenue. Meanwhile, advertising on LinkedIn has also taken a hit, and so have PC sales (which, across the domain and not just Microsoft, slid by 19.5% YoY globally). Microsoft’s Q3 2022 (FY23 Q1) results are expected to be released next week.
Among those laid off from Microsoft are director of test Greg Chapman, group product/program manager KC Lemson, and others.
In the meantime, Microsoft has embarked on an acquisition spree to maintain leadership in various tech domains. At present, Redmond’s planned $68.7 billion acquisition of Activision Blizzard is being reviewed by multiple antitrust regulators. Since January 2020, Microsoft has acquired tens of companies, including Nuance Communications for $19.7 billion, ZeniMax Media for $8.1 billion, Affirmed Networks for $1.35 billion, RiskIQ for $500 million, CyberX for $165 million and others such as Kinvolk, CloudKnox, ReFirm Labs, etc.
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Asst. Editor, Spiceworks Ziff Davis
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