US tech giant Microsoft is gearing up to lay off thousands of employees as part of a plan to streamline its operations. Earlier this year, in January, the company let go of 2,000 employees who were deemed low performers, primarily affecting those in the gaming and sales sectors. However, according to a report by CNBC, the upcoming layoffs will not be performance-based. A spokesperson for the company confirmed that approximately 3 percent of the workforce would be impacted in this round of layoffs, which aims to reduce management layers.
As of June 2024, Microsoft employed 2,28,000 people. Following the January layoffs, the total headcount dropped to 226,000. This means that if they proceed with the 3 percent reduction, around 6,780 employees could potentially be laid off in this latest round. The spokesperson mentioned to CNBC, "We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace".
In 2023, Microsoft had already laid off 10,000 employees, making this the second significant round of layoffs in just a year. Those who were let go in January due to poor performance will only be eligible to return to the company after a minimum of two years. This news comes on the heels of Microsoft's solid earnings report for the March quarter, which exceeded expert expectations, thanks in part to strong growth in their cloud computing and AI sectors. Notably, Microsoft's net profit rose by 18 percent to $25.8 billion compared to the previous year.
Meanwhile, Microsoft reported a 33 percent year-over-year increase in Azure revenue for the quarter ending March 31, surpassing analyst estimates of 29.7 percent, as per data from Visible Alpha. AI was responsible for 16 percentage points of this growth, an increase from 13 points in the previous quarter.
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