Microsoft is laying off 3% of its workforce, affecting thousands of its 228,000 employees globally. This decision follows a meeting between CEO Satya Nadella and Indonesian President Joko Widodo. Microsoft reported a strong quarterly net income of $25.8 billion and an optimistic outlook. The layoffs aim to streamline operations by reducing management layers and are not performance-based. This move is the largest since last year’s elimination of 10,000 roles, highlighting ongoing organizational changes in response to a dynamic market. Microsoft’s stock recently reached its highest price of the year at $449.26.
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On April 30, 2024, Microsoft CEO Satya Nadella exited a meeting with Indonesian President Joko Widodo, held at the Presidential Palace in Jakarta, Indonesia.
Willy Kurniawan | Reuters
Microsoft announced on Tuesday that it will lay off 3% of its workforce across various levels, teams, and locations.
“We are making necessary organizational adjustments to position the company for success in a rapidly evolving marketplace,” a Microsoft spokesperson stated in a message to CNBC.
The company has reported stronger-than-anticipated results, with $25.8 billion in quarterly net income, along with a positive outlook in late April.
As of June, Microsoft employed 228,000 individuals globally, implying that thousands will be impacted by this decision.
This could be Microsoft’s most significant layoff since the reduction of 10,000 positions in 2023. Earlier this year, the company conducted a smaller round of layoffs based on performance. According to the spokesperson, these upcoming cuts are not performance-related.
The spokesperson indicated that one goal is to eliminate management layers. In January, Amazon revealed it would reduce staff after identifying “unnecessary layers” within its structure.
Recently, cybersecurity firm CrowdStrike announced it would dismiss 5% of its workforce.
In January, CEO Satya Nadella shared with analysts that the company would implement sales execution changes due to lower-than-expected growth in Azure cloud services that weren’t AI-related. However, AI-related cloud growth surpassed internal forecasts.
“How do you truly adjust incentives and go-to-market strategies?” Nadella remarked. “During periods of platform transitions, it’s vital to embrace new design wins instead of sticking to old methods.”
On Monday, Microsoft shares halted trading at $449.26, marking the peak price this year. They previously closed at an all-time high of $467.56 last July.
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