Microsoft makes another round of jobs cuts amid slowing economy

Around 1,000 souls reportedly tossed onto employment bonfire

Microsoft is quietly making another round of job cuts to clip costs as even the biggest technology companies react to the financial storm clouds gathering over the global economy.

In the latest move, first reported by Axios, Microsoft is understood to be laying off fewer than 1,000 people across the organization at all levels, teams and geographic locations. The company didn't specify numbers or areas where the reduction in personnel is taking place.

"Like all companies, we evaluate our business priorities on a regular basis ands make structural adjustments accordingly," said Microsoft in a statement. "We will continue to invest in our business and hire in key growth areas in the year ahead."

This is exactly the same statement Microsoft rolled out in July when it made 1,000 staff redundant as part of its annual summer clean-up when kicking off a new financial year. At the time, the company insisted the move was not related to fears about the recession.

Among those leaving include KC Lemson, the creator of the Ninja Cat mascot.

These are small percentages in the grand scheme of things: Microsoft employs 221,000 individuals. Nevertheless, those on the sharp end of the process will be looking for a new job amid rising inflation and a slowdown in certain segments of the tech world.

The PC industry shipped 19.5 percent fewer boxes in calendar Q3, the steepest drop since Gartner began recording its volume in 1995. Microsoft already slowed hiring for Windows, Office and Teams teams in May, and Intel paused recruitment in its related PC chip division.

At the time, Microsoft told us it was make sure it had the right level of resources "aligned to the right opportunity", and it would grow headcount in fiscal 2023.

Unfilled vacancies in the cloud division were also closed a few months back, but we struggled to see the rationale given the massive growth Microsoft booked, growing the Intelligent Cloud division to $75.25 billion in the year ended June 2022 from $60 billion in the prior fiscal.

Just last week, Microsoft said the challenging economy was playing into its hands in at least some ways. "I've not seen the current situation cause people to pause cloud spending", Scott Guthrie, cloud exec told CNBC.

The software giant isn't alone in preparing for the runaway growth in technology spending to slow: Cisco, Intel, Meta, Oracle and many, many more are also trying to act more prudently following the boom years of the pandemic. ®

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