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Microsoft cuts thousands of jobs in latest phase-out of tech giant | Business news

Microsoft is preparing to cut thousands of jobs in the latest move by one of the world’s biggest technology companies to reduce its workforce in the face of a slowing global economy.

Sky News has learned that the US software giant could announce plans to remove a significant number of records around the world within days.

Microsoftwhich employs more than 220,000 people, including 6,000 in the UK, is said to be considering cutting around 5% of its workforce, which if accurate would equate to around 11,000 jobs.

That number could not be confirmed Tuesday night, and one analyst suggested Wall Street would be surprised if the number wasn̵[ads1]7;t higher than that.

It was also unclear whether or how many UK positions might be affected.

The company, which has staked big bets on the growth of cloud computing and now has a market capitalization of $1.78tn, is due to report second-quarter results next week.

If finalized, a headcount announcement is likely to come before Satya Nadella, Microsoft’s chairman and CEO, updates investors on its financial results on January 24.

In recent weeks, a number of major tech companies have used the axe, with Amazon this month revealing plans to cut 18,000 jobs, or about 6% of its workforce.

Salesforce, the cloud software provider, said it would cut 8,000 jobs, while Meta, the owner of Facebook, is reducing its workforce by about 11,000 roles.

Big technology companies have been forced to react to signs of a global economic slowdown, with many recruiting tens of thousands of extra staff during the pandemic.

Microsoft cuts thousands of jobs in latest phase-out of tech giant |  Business news
Satya Nadella will update investors on Microsoft’s financial results next week

Under the ownership of Elon Musk, Twitter has also moved to cut thousands of jobs, while 6,000 have also gone at PC manufacturer HP.

Microsoft warned in October of a slowdown in its cloud computing business, an acknowledgment that large enterprise customers were rethinking 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 secular growth areas and managing our cost structure in a disciplined manner.”

The company has been transformed under Mr Nadella’s leadership, although earnings have been hampered by the strength of the dollar in recent quarters.

It is also fighting a battle with regulators to secure approval for a £56 billion takeover of Activision Blizzard, the maker of Call Of Duty.

Last month it surprised investors by buying 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 lifetime of the alliance.

Ahead of earnings next week, Microsoft shares were downgraded to a sell rating by analysts at Guggenheim, who claimed the figures “may disappoint investors”.

“While most investors view Microsoft as a large, stable business that can weather any storm, it has vulnerabilities, some of which could be exacerbated by this macro[economic] decline,” they wrote.

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

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