BENGALURU: Tech giant Microsoft on Wednesday announced that it would lay off 10,000 employees, almost 5% of its workforce globally through Q3FY23- March 31, starting January 18.
It is not yet clear how many Indian employees will be impacted by this reduction. Microsoft, which set up its India operations in 1990, employs over 20,000 people across 11 cities. These employees in India are engaged in sales and marketing, research, development and customer services and support.
In recent weeks, Amazon, Alphabet, and Salesforce among other major tech companies, announced that they will be lowering headcounts. Microsoft said that customers are now optimising their digital spending to do more with less and that the company will align cost structure with revenue and where it sees customer demand.
In a note to employees, Microsoft CEO Satya Nadella said, "We are living through times of significant change...We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform."
Microsoft also announced that it will continue to invest in strategic areas. It will allocate capital and talent to areas of secular growth 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. 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," Nadella added.
The company also said that benefits for employees outside the US will align with the employment laws in each country.
In his recent visit to India, Nadella highlighted how the cloud will be foundational to scaling India’s digital journey. He also spoke about OpenAI's ChatGPT, which is backed by Microsoft. According to reports, the company is planning to invest $10 billion in OpenAI.