After Meta or Amazon, it is Microsoft’s turn to announce that it is shrinking. This is 5% of the group’s payroll that must be returned soon.
The technology sector has been facing the economic crisis for several months, the recession is settling in several countries and the giants want to reduce their sails and be more cautious with their investments.
Despite the still record profits of the main players in the sector, the giants in turn announce significant savings plans by significantly reducing their number of employees. In the first quarter of its fiscal year, Microsoft announced $17.6 billion in profit. After Meta, Twitter or Amazon, it’s Microsoft’s turn to present its plans. 10,000 jobs are affected.
The head of Microsoft, Satya Nadella, published an article to explain the reasons for this decision. He believes that Microsoft’s customers and partners are reducing their needs and therefore the company must adapt to better weather the downturn.
The firm will thus reduce its payroll by 5% at the end of the 3rd quarter of its fiscal year, that is, before April 2023.
It is also up to Microsoft to reorient itself. Thus, if positions are eliminated, Satya Nadella reminds that the group will also continue to recruit.
In his announcement, Satya Nadella does not specify the sectors most affected by these job cuts. Frandroid understands that the teams in charge of material design at Microsoft (Surface and Xbox for example) could be affected by these job cuts.
For the group, Satya Nadella indicates that this transformation will represent a cost of 1.2 billion dollars, particularly for compensation. These will be adapted to the countries of the affected employees in accordance with the legislation. The letter doesn’t mention the many contractors who work with Microsoft, but we suspect the change in strategy should also have a significant impact.
Focus on AI
Satya Nadella does not dwell on his letter about the after. After all, it is about emphasizing the current situation and trying to reassure those affected.
It still evokes the anticipated next revolution in computing: AI, and the necessary investment in the sector by Microsoft.
As a reminder, the firm would like to bet $10 billion on OpenAI (ChatGPT) and wants to integrate generative AI into its services.
This letter comes exactly one year after the announcement of Microsoft’s proposed acquisition of Activision Blizzard for $68.7 billion.
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