Microsoft to cut nearly 1,000 jobs: reports

[mahatmakanejeeves]

Source: MarketWatch

Microsoft to cut nearly 1,000 jobs: reports

Last Updated: Oct. 18, 2022 at 8:38 a.m. ET
First Published: Oct. 17, 2022 at 11:00 p.m. ET
By Mike Murphy

Microsoft Corp. is laying off nearly 1,000 workers across multiple divisions, according to news reports Monday. ... Axios and Business Insider reported the cuts late Monday. Sources told the news organizations that the number of layoffs was under 1,000, and span various regions and departments — including Xbox and Edge. Microsoft MSFT, +3.92% has about 221,000 employees worldwide, according to its website.

In an email to MarketWatch, a Microsoft spokesperson confirmed the accuracy of the reports, adding: “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead.”

Microsoft is apparently the latest major tech company to cut staff amid fears of a looming recession. Snapchat parent Snap SNAP, +6.01% recently announced plans to slash 20% of its staff; Intel Corp. INTC, +1.97% is reportedly set to lay off thousands of workers by the end of the month; and companies including Apple Inc. AAPL, +2.91%, Oracle Corp. ORCL, +4.21% and Beyond Meat Inc. BYND, +0.64% have also cut jobs, while Facebook parent Meta Platforms Inc. META, +5.74% reportedly announced a hiring freeze last month.

A recent report by KPMG found 51% of CEOs polled said they are considering workplace reductions in the next six months.

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Read more: https://www.marketwatch.com/story/microsoft-to-cut-nearly-1-000-jobs-reports-11666062022

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Microsoft became the latest tech company to show signs of concern about future demand as it laid off employees this week #WSJWhatsNow https://on.wsj.com/3TcT1mE

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[getagrip_already]

1. They are merely cleaning the books......

All large companies do this. They wait for a reason, then they announce a large layoff. While some really are facing revenue issues, others are just cleaning house.

For the latter case, they are relieving themselves of very highly compensated individuals and replacing them with younger, lower paid workers over time. Microsoft will be hiring right though the layoffs.

Many are long past possessing cutting edge skills, and have settled into supporting or management roles. The companies view them as overpaid for the functions they are performing, so it is a convenient way to get rid of them.

The industry term is cleaning the books. Out with the old, highly paid and loyal employees and in with the young, hungry, and current skilled cheaper labor.

Rinse, lather, repeat.

Employees are capital equipment. Use them until they wear out or the roi is no longer favorable compared to a new mdel.

[Ford_Prefect]

6. And with it dump institutional wisdom that only comes with experience. This also how corporations

show just how short sighted they can be. I've watched it happen repeatedly. They overvalue the new and different without fully understanding either their customers or the reasons that they have them in the false belief that the company has them exclusively.

One other common feature of this kind of dumping is that product and service quality tends to decline markedly immediately after it.

[Yavin4]

2. Most corporate layoffs are not actual people being let go.

Rather, it's allowing natural attrition to happen. Not replacing the retired worker or the worker that got a better job somewhere else.

Also, the tech sector is highly R&D. When interest rates rise, corporations cut back severely on R&D as investors are looking for more value. They would rather that excess cash be paid out in dividends, not used for R&D projects.

[RainCaster]

3. So glad I left 2 months ago

No longer the forward thinking company it once was.

[global1]

4. A Self-Fulfilled Prophecy....

cutting staff amid fears of a looming recession.

Reacting to these fears just accelerates the process and will most likely create or force a recession.

Just think if all companies reacted the same way.

[Bayard]

5. Pound that, "poor economy," drum

Right before the mid-terms.

Yeah, we need that.

[andym]

7. High tech recognizes the Fed is engineering what will likely be a recession through interest rates

Since tech sales are very sensitive to economic activity, they need to test costs early. So far they are acting as if they expect a slowdown at the minimum.