Microsoft announced on Wednesday its plan to eliminate 10,000 jobs as it attempts to cut costs. The reduction will impact 4.5% of the company’s workforce of approximately 221,000 employees.
This comes after the tech giant saw a decline in PC sales and cloud growth. “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” CEO Satya Nadella said of the decision. He further explained that organizations across a broad range of industries are exercising caution amid growing recession concerns.
Prior to announcing the mass workforce reduction, Microsoft took several steps to reduce costs, including a slow down in hiring in its Windows, Office, and Teams divisions last May. The company went on to lay off 1% of its workforce in July before cutting another 1,000 jobs in October.
Microsoft’s PC sales have slowed dramatically since the coronavirus pandemic when customers were buying desktops and laptops en masse as they transitioned to work-from-home models, homeschooling, and playing games. Gartner reported a 28.5% worldwide decline in PC shipments during the fourth quarter of 2022 – the largest decline since this figure was first tracked during the mid-1990s.