May 13 (UPI) — Microsoft said Tuesday that nearly 3% of its workforce is being cut as other tech giants have recently acted similarly.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC and GeekWire.
Microsoft reported better-than-expected financial returns last month with more than $25 billion in quarterly net income.
As of June 2024, Microsoft had 228,000 reported employees around the globe and 126,000 U.S.-based workers.
It’s turning out to be likely Microsoft’s biggest round of job cuts since 2023, when 10,000 people were laid off.
But according to a venture capitalist, at around $200,000 a person, that sheds roughly $1.4 billion a year for Microsoft in this new round of cuts.
“CS college graduates can’t find jobs anyway, and it’s getting worse,” Deedy Das, a former Google engineer and principal partner at Menlo Park, Calif.-based Menlo Ventures, posted Tuesday afternoon on X. He said Microsoft grew ~10% a year from 2012-2022 but “has effectively plateaued” in the three years since.
A Microsoft spokesman added that one objective has been to reduce layers of management and that this new round of cuts were not related to a smaller, performance-based set of layoffs in January.
CFO Amy Hood said on the company’s April 30 earnings call that Microsoft was focused on building “high-performing teams and increasing our agility by reducing layers with fewer managers.”
Meanwhile, stock shares in Microsoft ended Monday in the day’s trading at its highest price this year so far at $449.26 after last July’s record at $467.56.
Nearly 60,000 tech employees have been laid off at 127 companies so far this year, according to Layoffs.fyi.
It arrived on top of last week’s announcement that software provider CrowdStrike will lay off about 5% of its own workforce.
Meanwhile, several economists told USA Today how the wave of tech industry layoffs could indicate that American consumers habits shifted since the COVID-19 pandemic.
