Microsoft is preparing to cut thousands of jobs as part of the latest move by one of the world’s biggest tech companies to cut its workforce in the face of a slowing global economy.
Sky News has learned that the US software giant could announce plans to remove a significant number of posts worldwide within days.
Microsoftwhich employs more than 220,000 people, including 6,000 in the UK, is reportedly considering cutting around 5% of its workforce, which, if true, would equate to around 11,000 jobs.
That number couldn’t be verified Tuesday night, and one analyst suggested Wall Street would be surprised if the number wasn’t higher than that.
It was also unclear whether or how many UK-based posts might be affected.
The company, which has placed huge bets on the growth of cloud computing and now has a market value of $1.78 billion, is expected to report second-quarter results next week.
If finalized, an announcement on the workforce reductions is expected to come before Satya Nadella, Microsoft’s chairman and CEO, briefs investors on its financial performance on Jan. 24.
In recent weeks, a host of big tech companies have wielded the axe, with Amazon this month unveiling plans to cut 18,000 jobs, or about 6% of its workforce.
Salesforce, the cloud software provider, said it would cut 8,000 jobs, while Meta, the owner of Facebook, would cut its workforce by around 11,000.
Big tech companies have been forced to react to signs of a global economic slowdown, with many hiring tens of thousands more staff during the pandemic.
Under Elon Musk’s ownership, Twitter also decided to cut thousands of jobs, while 6,000 were also cut at personal computer maker HP.
Microsoft warned in October of a slowdown in its cloud computing business, an acknowledgment that large enterprise customers were reassessing spending in response to economic challenges.
“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” Nadella said in October.
“In this environment, we are focused on helping our clients do more with less, while investing in secular growth areas and managing our cost structure in a disciplined manner.”
The company has transformed under Mr. Nadella’s leadership, although its profits have been hampered by the strong dollar in recent quarters.
He is also fighting a battle with regulators to get approval for a £56bn takeover of Activision Blizzard, the maker of Call Of Duty.
Last month it surprised investors by acquiring a £1.5 billion stake in the owner of the London Stock Exchange as part of a long-term cloud computing partnership.
Microsoft expects to generate $5 billion in revenue over the life of the alliance.
Ahead of its earnings next week, Microsoft’s stock was downgraded to a sell rating by Guggenheim analysts, who argued the numbers “could disappoint investors”.
“While most investors view Microsoft as a large, stable company that can weather any storm, it does have vulnerabilities, some of which could be exacerbated by this macro[economic] downturn,” they wrote.
Responding to a request from Sky News, a spokesperson said Microsoft “does not comment on rumors or speculation”.
