Microsoft's 10,000 job cuts didn't quite do the trick

Redmond confirms new round of layoffs in WARN notice

The 10,000 jobs Microsoft said it would prune from the corporation in January are done, but fresh filings with US state officials show the bloodletting continues.

A WARN notice posted in Washington shows 276 being let go in the state alone, but the global total is likely to be much higher and the cuts are much more widespread than the software giant's home state. Typically at Microsoft, a round of layoffs happen in early July following Redmond's June 30 fiscal end of year. Microsoft laid off about 1,000 people this time last year as it kicked off fiscal 2023. At the time, the company insisted the move was not related to fears about recession.

Anecdotally, The Reg noticed Microsoft workers all over the world posting #OpenToWork status notices on LinkedIn within the last few hours from various other US states including Arizona, Texas, Florida, Philadelphia, Illinois, and Michigan, as well as places as far afield as Canada and Denmark. Most appear to be in sales, support, and customer roles.

We asked Microsoft to confirm numbers, geographies and roles for the job cuts, but were only told: "Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners." The Washington layoffs take place from August 4 and from September 8, according to the notice.

CEO Satya Nadella's original SEC filing about the 10,000 job losses back in January noted that they would complete at the end of FY23 Q3.

The January layoffs were to cut costs as the industry tries to pull itself out of a post-pandemic sales slowdown as well as to correct an over-hiring trend during the tech boom that accompanied global COVID-19 lockdowns. Microsoft is far from the only company to take this step, with Google, Salesforce, Amazon, and Meta, among others, also making significant cuts over the past year.

Layoffs at Twitter, estimated at 70 percent or more, have been the most brutal, although critics have said that other tech companies are being shortsighted in shedding jobs to create that same short-term liquidity – when liquidity would arguably be more of a pressing need for the new owner of a certain business with a non-existent profit model.

Microsoft also recently froze pay for employees across the board, some of whom are smarting after hearing about the company's "landmark" year and noting Microsoft's June approval of a quarterly dividend of $0.68 per share for stockholders. Document discovery in the legal case over its acquisition of Activision recently revealed Nadella saying in a June 7 memo that the company hoped "to deliver in excess of 10 percent annual returns to our shareholders" by 2030.

Microsoft's most recent results for Q3 of its fiscal 2023 ended March 31 reported a net profit of $18.29 billion up from $16.72 billion. Revenue grew from $49.36 billion to $52.85 billion, although this does represent a slowdown.

In some somewhat heartening news, US tech job losses were down 49 percent in June, according to data from job consultants Challenger, Gray and Christmas. On a less optimistic note, the outfit also noted that despite the drop, June's total – for "the sixth time this year" – still shows cuts being higher than they were the corresponding month a year earlier.

The career consultants said technology was "leading in job cut announcements" for US-based employers this year with 141,516 job roles lost so far, up 2,353 percent from the 5,769 cuts announced in the same period last year. 2023 now has the "second-highest total for the sector ever" with only 2001, the year of the "tech bubble" recession, having more. That year, 168,395 cuts were announced in technology.

"The drop in cuts is not unusual for the summer months. In fact, June is historically the slowest month on average for announcements. It is also possible that the deep job losses predicted due to inflation and interest rates will not come to pass, particularly as the Fed holds rates," said senior veep Andrew Challenger. ®

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