Microsoft Says It's Laying Off 10,000 Workers

Microsoft is cutting 10,000 workers over the next eight months, the software giant said in a securities filing Wednesday.

The company said the cuts, some of which begin immediately, represent "less than 5 percent of our total employee base."

The company hired rapidly during the pandemic to keep up with intense customer demand. Since 2019, Microsoft added about 75,000 employees, according to Wedbush analysts. But with the economy now slowing and a potential recession on the horizon, Microsoft's customers are trying "to do more with less," the company said. 

Laid-off workers will receive 60 days' notice, six months' health care coverage and stock vesting and "above-market severance pay," Microsoft said.

"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," CEO Satya Nadella said in a statement on on Microsoft's corporate blog.

The company said it will also be making changes to its hardware portfolio and consolidating its leased office locations.

"While we are eliminating roles in some areas, we will continue to hire in key strategic areas," the memo said, emphasizing the importance of building a "new computer platform" using advances in artificial intelligence.

Microsoft has 220,000 employees globally, including about 122,000 in the U.S., according to its website.

"We are seeing the clock strike midnight for the tech sector after a decade of hyper growth, and now major layoffs are being seen at [Microsoft], Salesforce, Meta, Amazon, among many others across the Valley. This is a rip the band-aid off moment to preserve margins and cut costs," Wedbush analysts said.

The technology industry shed the most jobs of any sector last year, eliminating nearly 100,000 positions in 2022, according to Challenger, Gray & Christmas.

"The tech sector is undergoing significant changes as a result of recession fears," Andrew Challenger, senior vice president with the outplacement firm, said in a statement, noting that the scale of layoffs in the industry is the greatest since the dotcom bust in 2001. "Like with other more established sectors, tech is maturing and that typically leads to workforce reductions as companies shift focus."

The Associated Press contributed reporting.