Microsoft Cuts Staff But Insists Hiring Continues

Software giant Microsoft becomes latest tech to trim its workforce headcount, as other tech firms slow hiring plans or reduce employees

Microsoft has begun cutting jobs as part of a structural adjustment, but the software giant said it still intends to grow its headcount in the current fiscal year.

Bloomberg reported that on Monday Redmond realigned its business groups and roles after its fiscal year closed on 30 June. It reportedly said it plans to keep hiring for other roles, and finnish the current fiscal year with an increased headcount.

But the firm is laying off some staff, which reportedly affects less than 1 percent of the 180,000 strong workforce around the world.

microsoft future decoded windows

Hiring slowdown

The development comes after it was reported in May that management the Windows and Office divisions had been instructed to adopt a more conservative approach to hiring new people.

That came as the world faces inflationary pressures, rising fuel costs and food prices, caused in part by Russia’s illegal invasion of Ukraine, and the economic fallout from lockdowns imposed during the global Coronavirus pandemic.

Microsoft said at the time the hiring slowdown was not company-wide, and overall hiring at the software giant was expected to continue, and that such caution was typical in periods of economic volatility.

Last month Microsoft also axed 400 staff when it confirmed that it was ‘substantially reducing’ its business in Russia that will impact more than 400 local employees.

Further layoffs

And now Bloomberg has reported that further layoffs are taking place.

“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 told the publication in an emailed statement.

“We will continue to invest in our business and grow headcount overall in the year ahead.”

According to Bloomberg, Microsoft typically announces job cuts shortly after the 4 July holiday in previous years, as it makes changes for the new fiscal period.

The company said the layoffs were not spurred by the worsening economic picture, but in May it also slowed

Worrying signs

Microsoft move comes after IDC Research revealed a worrying decline in PC shipments, which could impact Microsoft’s Windows operating systems business.

IDC reported that worldwide PC shipments fell 15.3 percent in the second quarter of 2022, “as supply and demand both waver.”

Microsoft’s last round of job losses was back in 2017, when it confirmed the loss of thousands of jobs across its global workforce as part of a major reorgnisation designed to push its cloud services.

Most of those were outside the US, and the job losses then disproportionately impacted its sales and marketing teams.

Other tech firms are also making workforce adjustments.

Facebook parent Meta Platforms last week decreased its target for adding software engineers this year from 10,000 to around 6,000 to 7,000.

Tesla meanwhile is already restructuring its operations and is in the process of axing 10,000 jobs, after Elon Musk announced he had a “super bad feeling” about the economy and planned to cut headcount by 10 percent and “pause all hiring worldwide.”