A temporary or permanent discharge of a worker or workers because of economic conditions or shortage of work. Microsoft, in a filing with the U.S. Securities And Exchange Commission, noted that the planned job cuts represent less than 5 percent of its total employee base, with some notifications already happening. Meanwhile, Microsoft said it will continue to hire in key strategic areas. The expected charge, which represents a $0.12 negative impact to earnings per share in the second quarter, is related to severance costs, changes to hardware portfolio, and the cost of lease consolidation as it creates higher density across its workspaces. The company noted that U.S.-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination. This is regardless of whether such notice is legally required. Meanwhile, benefits for employees outside the U.S. will align with the employment laws in each country. As of June 30, the company had 221,000 full-time employees, including 122,000 in the U.S. and 99,000 internationally. The software maker, which was experiencing slowing revenue growth, said there is significant change in customer behaviour. During the pandemic, they accelerated their digital spend, but now is in the process of optimising digital spend to do more with less.
Microsoft strategy “confirms our view of a margin recovery in the second half of the year, analysts at RBC wrote. It will also help the company continue to invest in growth areas such as “cloud, M&A (Activision), key innovation bets (ChatGPT) and stay on the left lane of innovation while cutting non-strategic areas (hardware, etc). Microsoft’s layoffs also draw attention to the fact that the only tech giants to have avoided significant layoffs this cycle are Google and Apple. Apple has also avoided layoffs, but there is a hiring freeze that could last through September. During Apple’s third-quarter earnings conference call, CEO Tim Cook said the company will do so “deliberately to reflect the realities of the environment.” Google’s parent company Alphabet has had layoffs at Verily, its health sciences division, but Google itself hasn’t seen any major cuts.
However, employees suspect that could happen as CEO Sundar Pichai said it was “difficult to predict the future” when asked about layoffs at an all-hands meeting in December, Insider previously reported.
While analysts are hoping these cost-cutting strategies will help over the long term, they anticipate things will get worse before they get better in the short term.
Microsoft365, Salesforce, Amazon, and others have seen years of enormous growth and hired tens of thousands of new employees during the last three years. Now they seem to be hitting a wall, analysts said. As Salesforce, Microsoft, and other business-oriented tech companies see their customers cut IT budgets, they anticipate shrinking revenue, cost cutting, and perhaps another round of layoffs.
The job cuts took place across the country, the sources told the publication. However, details on the number of jobs lost or units that have been impacted were not immediately known. The sector, which was growing up until last year, has suffered from rising inflation and mortgage rates, which are at the highest level in two decades. An aggressive monetary policy tightening campaign by the US Federal Reserve has put pressure on refinancing as well. According to the report, Wells Fargo has already cut hundreds of jobs in its mortgage division this year and the most recent layoffs are in addition to those. In October this year, Wells Fargo chief financial officer Mike Santomassimo told investors that the bank expects the home lending business to “remain challenging in the near term.”
Netflix Inc said it laid off 300 employees, or about 4% of its workforce, in the second round of job cuts aimed at lowering costs after the streaming giant lost subscribers for the first time in more than a decade. The move mostly affected its U.S. workforce and came after the company cut 150 jobs last month. The world’s dominant streaming service has come under pressure in recent months as inflation, the war in Ukraine and fierce competition weigh on subscriber growth. After the subscriber drop in the first quarter, Netflix has forecast even deeper losses for the current period.
Since Mark Zuckerberg founded Facebook in 2004, the Silicon Valley company has steadily hired more employees. At the end of September, it had amassed its largest-ever number of workers, totalling 87,314 people. Meta said it was laying off more than 11,000 people, or about 13 percent of its work force, in what amounted to the company’s most significant job cuts. The layoffs were made across departments and regions, with areas like recruiting and business teams affected more than others. The divisions that were not cut as steeply included engineers working on projects related to the metaverse, the immersive online world that Mr. Zuckerberg has bet big on, two people with knowledge of the matter said.
Bank of America Corp. started telling executives to pause hiring except for the most vital positions, as it tries to keep a lid on costs and prepare for a possible economic downturn. The move is an escalation of the company’s decision late last year to slow hiring after fewer employees decided to leave of their own accord, according to people with knowledge of the matter. Bank of America will hold off on bringing in new workers until at least mid-year or until the economy shows signs of a turnaround, according to the people, who asked not to be identified discussing private plans. Certain roles will still be filled in units that have seen revenue growth, including business banking, trading and wealth management, as well as technology jobs.
