Microsoft confirms layoffs ahead of earnings report

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Microsoft confirms layoffs ahead of earnings report

Microsoft is the latest technology company to shed staff, as IT budgets decelerate ahead of an anticipated recession.

“Today we notified a small number of employees that their roles have been eliminated,” a Microsoft spokesperson said in a statement to CRN.

“This was a result of a strategic realignment, and, like all companies, we evaluate our business on a regular basis.

We continue to invest in certain areas and grow headcount in the year ahead,” the spokesperson said.

Bloomberg first reported on the layoffs.

The tech giant is expected to report its fourth fiscal quarter and fiscal year 2022 earnings later this month, though the company has not given an exact date yet.

Microsoft employed about 181,000 people at the end of June 2021, according to a regulatory filing. 

The cuts hit less than one percent of the company.

Microsoft is not alone with layoffs: Oracle recently mulled reducing costs by as much as $1 billion and as a result, possibly letting go of thousands of its employees as early as August this year.

In a note published this week by Morgan Stanley, the investment bank said that Microsoft faces some headwinds with signs of decelerating IT budgets ahead of a potential recession.

“Microsoft screens well relative to many software peers, but is not immune” to macroeconomic conditions, according to the note, which says to watch out for negative trends in Microsoft’s consumer business which includes gaming and retail Office 365 subscriptions.

A longer China shutdown could also eat into PC, Surface and Windows revenue, Morgan Stanley said.



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