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Blue Screen of Unemployment: Microsoft to Lay Off 10,000 Employees

Tech giant Microsoft is reportedly laying off 10,000 employees as the company braces for slower revenue growth. The layoff will impact about five percent of the software company’s headcount.

CNBC reports that Microsoft has announced the layoff of 10,000 employees through March 31 as the company prepares for slower revenue growth. The software giant further stated that it will be taking a $1.2 billion charge tied to a lease consolidation and other activities.

Multiple tech firms have lowered headcount in recent weeks, including Google, Amazon, and Salesforce. Microsoft’s mass layoffs come after the demand for cloud computing and collaboration services increased during the coronavirus pandemic. Now with more industries returning to in-person work, demand has declined.

In July, Microsoft stated that it would lay off less than one percent of employees, and in October the company confirmed job cuts of less than 1,000 employees. Microsoft CEO Satya Nadella told employees in a memo: “I’m confident that Microsoft will emerge from this stronger and more competitive.”

The new layoffs by Microsoft will reduce the company’s headcount by less than five percent. Employees affected by the layoffs are expected to find out whether or not they’ve been let go at some point this week.

Microsoft shares increased in value slightly at the U.S. open following the announcement. Employees that are eligible for benefits will receive severance above market price, health care, and stock vesting for six months and will be notified 60 days before their work ends.

Nadella described the current trends in the business climate in recent months, stating: “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. 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.”

Microsoft had called for two percent revenue growth in the fiscal second quarter, the slowest rate since 2016.


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