Microsoft cuts about 1,000 jobs - Axios
(Reuters) - Microsoft Corp laid off under 1,000 employees across several divisions this week, Axios reported on Tuesday, citing a source, making it the latest U.S. technology company to cut jobs or slow hiring amid a global economic slowdown.
The layoffs affected less than 1% of Microsoft's total workforce of around 221,000 as of June 30.
The company had said in July that a small number of roles had been eliminated and that it would increase its headcount down the line.
Microsoft did not immediately respond to a Reuters' request for comment on the Axios report.
Several technology companies, including Meta Platforms Inc, Twitter Inc and Snap Inc have cut jobs and scaled back hiring in recent months as global economic growth slows due to higher interest rates, rising inflation and an energy crisis in Europe.
(Reporting by Jyoti Narayan in Bengaluru; Editing by Savio D'Souza)
Christiaan Hetzner
Tue, October 18, 2022
Four years ago Microsoft dedicated a glowing portrait to KC Lemson in order to properly celebrate her contribution as the creator of its unofficial yet beloved Ninja Cat mascot.
On Monday, the trailblazing “maestro of fun, mastermind of memes,” as Microsoft described her, found out she had been laid off from the software company she loved after more than two decades.
“I’ve got a good network and sent a lot of feelers out today, but there just aren’t many openings,” she posted late on Monday in the kind of statement that is sounding increasingly familiar as the tech industry braces for a recession.
Lemson was one of up to 1,000 employees who received the dreaded pink slip. According to a report by Axios, the layoffs were spread out across a variety of staffing levels, teams, and regions of the world.
https://twitter.com/kclemson/status/1582175419268501504?s=20u0026t=lqnAXmmyQ_Caa1m5_Txpcg
“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead,” Microsoft said in a statement to Axios.
The cutback wasn’t dramatic when compared with the scale of other recent staff reductions announced or rumored recently. Some 221,000 people worked at Microsoft as of the end of June.
Yet when a bellwether like Microsoft feels the need to wield the axe, it’s a grim sign of broader tech weakness—especially after the company already trimmed staff in July. Microsoft has generally been considered to be recession-proof, one of the few resilient stocks that investors should hold in a downturn.
The software giant could therefore be the “next shoe to drop,” Jordan Klein, managing director for tech, media, and telecom sector trading at Mizuho Securities, said in a note to clients last week: “Post AMD (warning) and the much weaker PC read-through last week, I see growing earnings risk facing Microsoft in coming quarters.”
The company reports fiscal first-quarter earnings next Tuesday after U.S. markets close.
Top destination for CIO tech spend
Professional investors continue to favor the stock owing to its dominant Office suite of productivity software; the Azure cloud-computing business that remains a key growth driver; and a management team around CEO Satya Nadella that is considered to be one of the best in the industry.
In July, the software developer nabbed a flagship deal with Netflix to support its new lower-priced ad-tier subscription. Last week it partnered with Meta to offer a more immersive experience for corporate customers using Mark Zuckerberg’s upcoming Quest Pro virtual reality headset, complete with security and compliance features.
“Inflationary pressures, recessionary concerns, and things like that tend to bite more harshly on the consumer side of the equation,” Raymond James analyst Andrew Marok told Yahoo Finance earlier this month. “Whereas with an enterprise software company like Microsoft dealing with such a wide product portfolio—from productivity software to public cloud to operating systems and beyond—we think the environment for a company like this with the scale it has is very advantageous.”
https://www.youtube.com/watch?v=6wnI1_RDzeo
With a market cap of $1.8 trillion, Microsoft is the world’s third most valuable company behind tech rival Apple and oil producer Aramco. Although shares have fallen 29% year to date, it has outperformed a 32% decline in the broader Nasdaq 100 tech index.
According to finance site MarketBeat, 29 analysts covering the stock rate it a buy or outperform, versus just three hold recommendations and zero sell ratings.
Bulls therefore argue chief information officers will continue to snap up Microsoft products as companies look for a way to stretch their increasingly limited budgets going into a possible recession.
“The solution to getting us out of the tight labor market is tech capex. CIOs are increasing their spend on software, cloud; and infrastructure is important and cybersecurity—you get all of that with Microsoft,” said Nancy Tengler, CEO of Laffer Tengler Investments, on CNBC. “They’re the top tech spend through 2025 according to CIO surveys.”
For Lemson and the hundreds like her, however, that’s little consolation right now.
One of Microsoft's Massachusetts offices is located at One Memorial Drive in Cambridge.
By Lucia Maffei – Technology Reporter, Boston Business Journal
Oct 18, 2022
Microsoft Corp. (Nasdaq: MSFT) did not say if and how its reported layoffs across multiple divisions will impact its New England hub.
The Redmond-based tech giant (Nasdaq: MSFT) is cutting under 1,000 positions across a variety of levels, teams and parts of the world, per a report in Axios Monday. A number of layoffs have started this week, according to a follow-up story in the Wall Street Journal.
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Asked about the impact of the job cuts on the company's Massachusetts workforce, a spokesperson for Microsoft sent over a prepared statement.
"Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly," a Microsoft spokesperson wrote. "We will continue to invest in our business and hire in key growth areas in the year ahead."
The company did not say how many employees it currently has in the Bay State.
Microsoft New England has offices across Cambridge, Burlington and Acton. Local teams work on research, machine learning for Microsoft's cloud Azure, artificial intelligence and semantic machines.
Cambridge is also home to The Garage, Microsoft's own community and learning space for employees. Opened in 2018, the approximately 15,000-square-feet space is located on the second floor of the Microsoft New England Research and Development Center (also known as N.E.R.D.) in Kendall Square.
In March this year, Microsoft completed its $19.7 billion acquisition of Burlington voice-tech company Nuance Communications Inc. At that time, a spokesperson for the tech giant said the company planned to integrate the two teams. Nuance had about 7,100 full-time employees, including 45% based in the U.S.
As of June this year, Microsoft employed approximately 221,000 full-time employees, including 122,000 in the U.S, according to public documents.
Several tech companies have paused expansion plans, implemented hiring freezes or made layoffs after a slowdown in growth tied to a lackluster economic outlook. Facebook parent company Meta Platforms Inc. (Nasdaq: META) also disclosed plans to contain headcount and said it was aiming to build a smaller company in 2023. Facebook also remained silent over the potential impact of such plans on Greater Boston.
Cuts at Microsoft came after the company noted in its most recent earnings report in July how "evolving macroeconomic conditions and other unforeseen items" negatively impacted financial results. Unfavorable foreign exchange rate, extended production shutdowns in China, reductions in advertising spend and the decision to scale down operations in Russia due to the ongoing war with Ukraine accounted for losses worth hundreds of millions, according to a release. For fiscal 2022, the company reported a profit of $72.7 billion on a $198.3 billion revenue.
"As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas," said Microsoft CFO Amy Hood in a July statement.
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