Microsoft sacks 10,000 employees: Check CEO Satya Nadella’s full letter to employees here

Microsoft Chairman and CEO Satya Nadella said that the company will be “making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3 (third quarter)”. Microsoft currently has more than 220,000 employees, and this round of layoffs affects around 5 per cent of its workforce. Some employees will be notified, but the entire 10,000 layoffs should be completed by the end of March, Nadella said.

In a blog post, Nadella said that it is important to note that “while we are eliminating roles in some areas, we will continue to hire in key strategic areas”. “We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible,” said the Microsoft CEO.

The company had laid off around 1,000 employees late last year. Nadella said that organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.

Here is the full text of the blog post Nadella wrote for Microsoft employees about the layoffs at the company.

Subject: Focusing on our short- and long-term opportunity

We’re living through times of significant change, and as I meet with customers and partners, a few things are clear. First, 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. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.

This is the context in which we as a company must strive to deliver results on an ongoing basis, while investing in our long-term opportunity. I’m confident that Microsoft will emerge from this stronger and more competitive, but it requires us to take actions grounded in three priorities.

First, we will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today. It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible.

Second, we will continue to invest in strategic areas for our future, meaning we are allocating both our capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas. These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts. As such, we are taking a $1.2 billion charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces.

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