Microsoft is laying off 5% of its workforce, or 10,000 jobs, amidst global economic slowdown. This will result in a charge of $1.2 billion in the second quarter, mainly in severance pay, according to the company's CEO.
"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," Chief Executive Satya Nadella said in an email to employees on Jan. 18 (as mentioned in media reports). "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," Nadella added.
Nadella said Microsoft will continue to invest and hire in priority areas. "We will continue to hire in key strategic areas," he said. "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."