Microsoft lays off part of its workforce as part of a "realignment"

Microsoft today became the latest major tech company to cut jobs during a time of growing economic uncertainty. Bloomberg reports that the Redmond-based firm is "realigning business groups and roles" after its fiscal year-end (June 30), even as the company intends to increase its workforce in the coming months.

The layoffs would affect less than 1% of Microsoft's 180,000 employees and follow no clear pattern in terms of geography or product division, affecting teams, including solutions and customer and partner consulting. They come after Microsoft slowed hiring across Windows, Teams and Office groups while ensuring hiring was not affected by industry headwinds.

“Today we had a small number of role eliminations. Like all companies, we regularly assess our business priorities and make structural adjustments accordingly,” Microsoft told Bloomberg in a statement sent via email. "We will continue to invest in our business and grow our workforce globally in the coming year."

Microsoft reported strong third-quarter earnings, with a 26% year-over-year increase in cloud revenue and overall revenue of $49.4 billion. But in early June, the company revised down its revenue and earnings guidance for the fourth quarter, citing the impact of currency fluctuations.

Bloomberg notes that in recent years, Microsoft has typically announced job cuts shortly after the July 4 holiday in the United States as it makes changes for the new fiscal period.

Layoffs in the tech sector have accelerated in recent months as investors, fearing a recession, pull back. Startups, especially those in capital-intensive businesses like delivery, events and fintech, have borne the brunt of the impact. But as the adverse conditions persist, there has been a ripple effect. Oracle, for example, is reportedly considering a billion-dollar cost-cutting initiative that would result in thousands of layoffs.

Beyond Microsoft and Oracle, Twitter laid off a third of its recruiting team last week. Tesla has laid off hundreds of employees over the past month. And Meta bands are bracing for layoffs after company officials were reportedly told to "move to quit" bad performers. Meta, which CEO Mark Zuckerberg sees as being in the midst of "one of the worst downturns...in recent history", has previously said it will cut its target for hiring new engineers by around 30%. this year.

Nvidia, Lyft, Snap, Uber, Spotify, Intel and Salesforce are among other publicly traded tech companies that have slowed hiring this spring. So far, Google, IBM, and Amazon have not made similar moves.