In significant news from the world of big tech, Microsoft announced plans this morning to lay off 10,000 employees, nearly 5 percent of its global workforce. The move, which is part of a larger effort to trim excess costs, will cost the company roughly $1.2 billion in reconstructing expenses and severance packages.
In regards to the layoffs, Brad Reback, an analyst at the investment bank Stifel, said in an interview with the New York Times: “The reality is you can adjust hiring very quickly, and that is what is going on… I don’t think this is symptomatic of a bigger issue. This is more along the lines of a normalization.”
The pandemic fueled eCommerce boom of 2020 and 2021 led many companies to rapidly expand operations to keep up with the surging demand for consumer goods. These layoffs reflect this cooling of demand for consumer goods and the industry’s shift in focus towards more strategic interests such as AI development.
Microsoft isn’t the only company to embark on a strategy of major layoffs in the first month of 2023. Amazon and Twitter have done the same to the tune of 18,000 and 10,000 employees respectively.