Microsoft says staff layoffs not linked to recession fears

Redmond characterizes job losses as an annual clean-up rather than a sign of anything serious

Microsoft has laid off more than a thousand staff, classifying this as a sort of summer clean-up following closure of the latest financial year.

The job losses, first reported by Bloomberg, impact less than 1 percent of the 180,000-strong global workforce, and are said to be varied across geography and job role, including consulting, partner solutions, and customer groups.

A Microsoft spokesperson said: "Today we had a small number of role eliminations. Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly."

Results for Q4 of Microsoft's fiscal 2022 are expected to appear near the end of this month with positive expectations.

For the nine months ended 31 March, Microsoft turned over $146.4 billion in sales versus $121.93 billion in the corresponding prior year period. Net profit was up to $55.9 billion from $44.8 billion.

There is nothing lurking in the results that would indicate this round of employee redundancies is related to anything serious, and the Microsoft spokesperson said it would "grow headcount overall" in fiscal '23.

With tech results season beckoning, stock market analysts will be looking for evidence of a slowdown in enterprise tech spending. In recent months, Cisco and others have dialed back on recruitment, signaling some uncertainty on the road ahead.

Cisco CFO and senior veep Scott Heren said in June that now is a "time for everyone to be prudent… So we're doing the same." Like Microsoft, he said it will hire in priority areas. "We're inspecting every opening."

Heren poured cold water on talk of a recession, saying Cisco has a multibillion-dollar backlog, including on software, and this engendered confidence in the business.

Also last month, Intel CEO Pat Gelsinger confirmed it was pausing recruitment in the PC division to "help us weather macroeconomic uncertainty". Salesforce said it is hiring in a "much more measured way." And Microsoft itself slowed hiring for Windows, Teams, and Office business units in May.

Just yesterday, it emerged that Oracle was looking to cut costs by $1bn. This includes a restructure of the organization and the potential elimination of thousands of jobs. Oracle has yet to publicly comment. ®

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