Tech Giant Prepares for Slower Growth and Global Recession
Microsoft is set to lay off approximately 5% of its global workforce, impacting over 10,000 employees starting 19 January, ahead of its quarterly earnings announcement.
Major Workforce Reductions
The layoffs, reported by Bloomberg, will primarily target Microsoft’s engineering division. In 2022, the company reduced its workforce by 1%, affecting roles in consulting and customer and partner solutions. However, this year’s cuts are expected to be “significantly larger.”
Impact in Singapore Unclear
Microsoft has not clarified whether positions in its Singapore offices will be affected. When contacted, the company declined to comment on speculation, stating: “Microsoft does not comment on rumours or speculation.”
Preparing for Economic Challenges
The layoffs come as Microsoft anticipates slower growth, with a forecasted 2% sales increase for the fiscal third quarter—the slowest since 2017. CEO Satya Nadella recently warned of challenging years ahead, citing a post-pandemic normalization in demand, rising interest rates, and a looming global recession.
“We did have a lot of acceleration during the pandemic, and there’s some amount of normalization of that demand. And on top of it, there is a real recession in some parts of the world,” Nadella said.
Tech Industry Trends
Microsoft joins other tech giants, such as Twitter and Amazon, in scaling back due to economic uncertainty. Amazon recently announced 18,000 job cuts, while Twitter laid off nearly 50% of its workforce, including positions in its Singapore office.
During the pandemic, tech companies rapidly expanded to meet rising demand for remote solutions. However, with the current “unusual and uncertain macroeconomic environment,” as Amazon described, these firms are now downsizing to adjust to slowing demand and maintain financial stability.
Microsoft’s decision reflects the ongoing recalibration across the tech industry, as companies brace for economic turbulence and shifting market conditions.
