Microsoft will be laying off thousands of workers in its latest attempt to cut down on global economic slowdown. This is the latest move from one of the largest technology companies in the world.
Sky News reports that the US software company could announce plans within days to eliminate a large number of posts from around the globe.
Microsoft has more than 220,000 employees, including 6,000 in Britain. It is believed that might be considering cutting roughly 5%, which would, if true, equate to about 11,000 jobs.
This number could not be confirmed on Tuesday night, and one analyst suggested Wall Street would be shocked if it was higher than that.
It wasn’t clear if or how many UK-based jobs might be affected.
The company has made huge bets about the growth of cloud computing, and has a market capitalization of $1.78tn. Next week, it will report its second quarter earnings.
If the negotiations are finalized, an announcement regarding headcount reductions will likely be made before Satya Nadella (Microsoft’s chairman, chief executive) updates investors about its financial performance on January 24,
A slew large tech companies have taken the brunt of recent events, with Amazon revealing plans to trim 18,000 jobs (or about 6%) in the coming weeks.
Salesforce, the cloud-based software provider, announced it would eliminate 8,000 jobs while Meta, the owner and operator of Facebook, will reduce its workforce by around 11,000 positions.
Many large technology companies were forced to react to signs of a global slowdown.
Twitter, which is owned by Elon Musk, has also made moves to reduce thousands of jobs. 6,000 employees have left HP, the personal computer manufacturer.
Microsoft warned of a slowdown within its cloud computing business in October. This was an acknowledgment that large corporate customers were reviewing their spending to address economic challenges.
In October, Mr Nadella stated that digital technology was the ultimate tailwind in a world with increasing headwinds.
“In this environment we are focused on helping customers do more with less while investing in secular growth areas, and managing our costs in a controlled way.”
Under Mr Nadella’s direction, the company has seen a transformation. However, its earnings have been affected by the strong dollar in recent quarters.
It is also fighting to win approval from regulators for a PS56bn acquisition of Activision Blizzard (the maker of Call Of Duty).
It surprised investors last month by purchasing a PS1.5bn stake at the London Stock Exchange owner as part of a long-term partnership in cloud computing.
Microsoft anticipates that the alliance will generate $5bn in revenues over its lifetime.
Analysts at Guggenheim downgraded Microsoft stock to a sell rating ahead of next week’s earnings. They said that the figures could disappoint investors.
They wrote that Microsoft is viewed by most investors as a stable, large business that can weather any storm. However, there are vulnerabilities to it, some of which could have been exacerbated due to the macroeconomic slowdown.
Sky News asked Microsoft if it would comment on speculation or rumours. A spokesperson for Microsoft said that they did not.