Microsoft has announced that it will lay off 10,000 employees by the end of March next year due to an uncertain economic outlook and changing priorities for its customers.
“It’s a tough choice we’ve made throughout our 47-year history to remain an important company in a relentless industry that doesn’t adapt to change,” Microsoft CEO Satya Nadella said in a letter to employees.
In the letter, Nadella noted that while customers have “accelerated their IT spending during the pandemic,” they are now looking to streamline it to “do more with less.”
He also said companies around the world were “cautious” about recession risks.
A company that will spend less than 5% of its workforce plans to adjust its IT equipment portfolio and cut jobs.
Asked about the layoffs during a speech at the Davos Economic Forum on Wednesday, Satya Nadella said it was due to inflation’s impact on economic growth and concluded that “no one can defy the laws of gravity.”
These measures will save $1.2 billion in second-quarter bills, which the company will release on Jan. 24.