Microsoft gateway sign at Redmond, Washington headquarters

Microsoft Announces Staff Layoffs for Second Time Since July

The tech giant did not confirm the number of employees, but sources say that fewer than 1,000 jobs will be impacted.

Microsoft is the latest tech company to announce staff layoffs. In the latest round, Microsoft is laying off employees from across the company, including employees in the Xbox division, legal, strategic missions and technology, and other divisions. Though the company did not confirm the total, sources say that fewer than 1,000 employers will be laid off, reports Insider.

“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” a Microsoft spokesperson said. “We will continue to invest in our business and hire in key growth areas in the year ahead.”

Tom Warren, a senior editor at The Verge, reported what he knew on Twitter.

July’s “strategic realignment”

In July, just prior to reporting their fiscal year-end results, Microsoft announced a “strategic realignment” which also included staff layoffs. At that time, the tech giant cut employees from teams including consulting and customer and partner solutions across a range of regions, said Bloomberg.

“Today we had a small number of role eliminations. Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” Microsoft said in a statement emailed to Bloomberg. “We will continue to invest in our business and grow headcount overall in the year ahead.”

Again, Microsoft did not quote numbers, but they said they would lay off less than 1% of their global workforce of 180,000. The company also said they would slow their hiring.

Microsoft stock

News of the staff layoffs did not have much impact on Microsoft stock (NASDAQ: MSFT). News of the layoffs started making the rounds online on October 17. On that date, Microsoft stock closed at $237.53 per share. As of 4 p.m. Eastern on October 21, Microsoft stock was valued at $242.12 per share, a slight increase. This is still well below the company’s 52-week high of $349.67 per share and uncomfortably close to the company’s 52-week low of $219.13.

Source: Google

On September 20, Microsoft announced a quarterly dividend of $0.68 per share, a 10% increase over the prior quarter’s dividend. It will be payable on December 8 to shareholders of record as of November 17.

Microsoft will host its next earnings call for the first quarter of fiscal year 2023 on October 25. Whether or not they plan to address the layoffs, analysts and journalists on the call are likely to ask about them and how they impact the company’s outlook for the next quarter.


Other tech companies feeling the pressure

Microsoft is not alone in terms of companies doing layoffs in 2022. Many other tech companies have laid off staff this year and/or frozen hiring except for key areas. Among those who have laid off staff are Byju, Netflix, Qumulo, SAP, Twitter, Patreon and Meta.

Insider Take

Microsoft typically does its layoffs around the last quarter of each fiscal year. That accounts for the July layoffs, so this round of layoffs is outside their standard cycle. Companies like Microsoft ramped up during the pandemic as the need for their cloud-based services increased. However, now that we have adapted, the economy is shifting, and unfortunately, human resources are often the first to go.

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