Microsoft to cut thousands of jobs in latest layoffs at tech giants | Business News

Microsoft is preparing to cut thousands of jobs in the face of a slowing global economy, the latest move by one of the world’s largest technology companies to lay off workers.

Sky News has learned that the US software giant is likely to announce plans to remove a large number of posts globally within days.

MicrosoftThe company, which has more than 220,000 employees, 6,000 of them in the UK, is said to be considering cutting around 5% of its workforce, which would equate to around 11,000 job cuts if accurate.

The figure could not be confirmed on Tuesday night, and one analyst said Wall Street would be surprised if it wasn’t higher than that.

It was unclear if or how many UK jobs might be affected.

The company, which is betting big on the growth of cloud computing and now has a market capitalization of $1.78 trillion, will report second-quarter earnings next week.

If finalized, the announcement about the layoffs could come before Microsoft Chairman and Chief Executive Satya Nadella updates investors on its financial results on Jan. 24.

Many of the big tech companies have swung an axe in recent weeks, with Amazon this month revealing plans to cut 18,000 jobs, or about 6% of its workforce.

Cloud software provider Salesforce said it would cut 8,000 jobs, while Facebook owner Meta will cut about 11,000 jobs.

Big tech companies have been forced to grapple with signs of a global economic slowdown, with many hiring tens of thousands of extra workers during the pandemic.

Microsoft CEO Satya Narayana Nadella
Satya Nadella to brief investors on Microsoft’s financial results next week

Under Elon Musk, Twitter also began cutting thousands of jobs, while PC maker Hewlett-Packard cut 6,000 jobs.

Microsoft warned in October of a slowdown in its cloud computing business, acknowledging that major enterprise customers were reassessing spending in response to economic challenges.

“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” Nadella said in October.

“In this environment, we are focused on helping our clients do more with less, while investing in long-term growth areas and managing our cost structure in a disciplined manner.”

The company has transformed itself under Mr. Nadella, though its earnings have been hurt by a stronger dollar in recent quarters.

It is also battling regulators to secure approval for its £56bn takeover of Call of Duty maker Activision Blizzard.

Last month it surprised investors by taking a £1.5bn stake in the owner of the London Stock Exchange as part of a long-term cloud computing partnership.

Microsoft expects to generate $5 billion in revenue over the life of the alliance.

Ahead of next week’s earnings report, Guggenheim analysts downgraded Microsoft stock to a sell rating, saying the numbers “could disappoint investors.”

“While most investors view Microsoft as a large, stable business that can weather any storm, it does have holes, some of which could be exacerbated by this macroeconomic[economic] Slow down,” they wrote.

In response to inquiries from Sky News, a spokesperson said Microsoft “does not comment on rumor or speculation”.

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