Microsoft is shedding even more employees this week, with CEO Satya Nadella revealing 10,000 layoffs during “times of considerable change.” The layoffs are said to include Xbox and Bethesda employees, as well as Microsoft’s larger organizations.
In a note to employees, Nadella stated that the 10,000 layoffs, which amount to less than 5% of the company’s entire workforce of more than 220,000, will begin today, January 18, and will go until the end of the third quarter of fiscal year 2023. According to The New York Times, Microsoft has hired more than 75,000 individuals since 2019 to help fulfill the rising demand for internet services and cloud computing as a result of the pandemic’s emergence.
This is only the latest round of layoffs at Microsoft; Nadella cut over 25,000 positions between 2014 and 2015 as a result of the company’s decision to exit the Nokia business.
The CEO did not specify which departments inside Microsoft are affected, but according to Bloomberg, Microsoft’s Xbox and Bethesda divisions are both affected in some way. When reached by GameSpot, a Microsoft spokeswoman declined to comment on whether the layoffs affected Xbox. According to Bloomberg’s Jason Schrier, numerous staff at Halo Infinite creator “343 Industries were heavily impacted.”
Nadella explained the job losses as a result of Microsoft adjusting its business in reaction to the epidemic, looming recession fears, and advances in AI technology.
Microsoft will incur a $1.2 billion charge owing to outgoing employee severance costs, as well as “changes to our hardware portfolio and the cost of lease consolidation as we generate more density throughout our workplaces.”
The job losses, according to Nadella, were “painful but necessary.” He stated that affected employees will receive “full support” from Microsoft, which includes “above-market” severance pay, six months of healthcare, ongoing vesting of stock awards for six months, career transition services, and 60 days’ notice before termination for those who have not yet been notified. This relates to Microsoft employees in the United States. Employees affected outside the United States will receive benefits in accordance with local labor legislation.
For Microsoft’s latest quarter, the company earned $50.1 billion in revenue, which was up 11%, and made a profit of $17.6 billion (down 14%).