Microsoft Plans to Announce Layoffs as Early as Wednesday Morning

Author: Editors Desk Source: WSJ:

January 18, 2023 at 06:25

Microsoft said late last year that a drop in personal computer sales and the dollar’s strength were a drag on expansion. PHOTO: DAVID BECKER/GETTY IMAGES

Software company’s revenue growth has slowed in recent quarters

Microsoft Corp. MSFT 0.47%increase; green up pointing triangle is planning to announce more layoffs as soon as Wednesday morning, according to a person familiar with the matter.

Last year, Microsoft had more than one round of layoffs but didn’t announce how many positions it cut. The round that started in July affected less than 1% of the company’s total workforce of more than 200,000 people, the company said at the time.

Sky News earlier reported the plan to announce layoffs this week.

Since the start of the new year, multiple tech companies have culled their ranks as the pandemic boom that caused head counts to swell petered out. Worries about inflation and a slowing global economy have spurred tech-sector leaders to prepare for leaner times.

The layoffs have been affecting companies throughout the industry. Amazon.com Inc. announced that it was laying off 18,000 people. This month business software provider Salesforce Inc. CRM -0.70%decrease; red down pointing triangle announced plans to lay off 8,000 employees, or 10% of its global workforce—marking the biggest head count reduction in the company’s history. On Tuesday, Unity Software Inc. said it was laying off 284 employees. The provider of tools for creating videogames and other applications had earlier announced layoffs in June when it cut around 225 jobs.

Microsoft’s expected move comes the week before it is scheduled to detail its latest quarterly earnings. Late last year, the Redmond, Wash., software company said a sharp decline in personal computer sales and the dollar’s strength were weighing on expansion. In the three months through September, its revenue growth was 11% from a year earlier, its weakest in more than five years.

Microsoft has been enjoying some positive attention this year, as it negotiates increasing its investment in buzzy AI startup OpenAI. This week the company said it was opening up access to OpenAI tools such as image generator Dall-E 2 and the technology behind ChatGPT, which can answer questions and write essays and poems.

Its shares have slipped 23% over the last 12 months, broadly in line with the tech-heavy Nasdaq Composite Index which fell 26%.

Write to Tom Dotan at tom.dotan@wsj.com