Microsoft CEO confirms 10,000 job cuts as recession worries hit tech sector

“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear.”

Yesterday, we wrote about Microsoft after reports the tech giant was planning to cut thousands of additional jobs as layoffs and hiring freezes hit the tech sector due to the global economic slowdown.

Today, Microsoft confirmed it would lay off 10,000 jobs instead of the 11,000 reported by major news outlets. In addition to the layoff, the Redmond-based company also said that it would take a  $1.2-billion charge as its cloud-computing customers dissect their spending and the company braces for a potential recession. The layoff is far larger than the 1,000 job cuts the company announced back in October 2020.

In a memo to Microsoft employees, CEO Satya Nadella said the layoffs, affecting less than 5% of the workforce, would conclude by the end of March, with notifications beginning Wednesday. Nadella added that customers wanted to “optimize their digital spend to do more with less” and “exercise caution as some parts of the world are in a recession and other parts are anticipating one.”

The news comes at a time when the tech giant was trying to expand into generative artificial intelligence to further broaden its service offerings. In July 2019, Microsoft invested $1 billion in OpenAI as part of the effort for the two companies to work together to bring supercomputing technologies.

Microsoft announced yesterday it was widening access to ChatGPT through its Azure OpenAI Service. The tech giant said that OpenAI’s technology, which has so far been available to its cloud-computing customers in a program it called the Azure OpenAI Service, is now generally available.

In a blog post, Eric Boyd, Microsoft Corporate Vice President of AI Platform, said: “Today, we are excited to announce the general availability of Azure OpenAI Service as part of Microsoft’s continued commitment to democratizing AI, and ongoing partnership with OpenAI.”

Rumors are also swirling that the tech giant is about to give $10 billion to OpenAI in exchange to own half of the company. Microsoft is in talks to acquire a 49% stake worth $10 billion in ChatGPT owner OpenAI, Semafor reported on Monday, citing people familiar with the matter. The funding includes other venture capital firms and will push the valuation of the San Francisco-based OpenAI to $29 billion, the report said.

Microsoft employs more than 220,000 people globally, including roughly 122,000 people in the U.S., according to its corporate website. However, Microsoft declined to confirm Sky’s report, telling multiple media outlets it doesn’t comment “on rumor.”

As we reported last week, at least 104 companies have laid off 26,061 tech workers in the first two weeks of this year, according to Layoffs.FYI, a site that has been tracking all tech layoffs using data compiled from public reports.

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• Source: https://techstartups.com/2023/01/18/microsoft-eliminate-10000-jobs-tech-layoffs-intensify/