Microsoft is planning to terminate a great number of jobs in its newest endeavor to downsize its personnel due to a worldwide economic slowdown.
Sources have revealed to Sky News that the US-based software company could be ready to declare a reduction of jobs globally in the coming days, just as they are expected to integrate AI into their search engine.
Microsoft is reportedly thinking about reducing its global workforce by 5%, or about 11,000 employees. This would include 6,000 jobs in the UK, as the company has a total of 220,000 employees.
It was impossible to confirm the figure on Tuesday night, and one analyst indicated that the markets would be shocked if the number was not higher than expected.
The number of UK-based positions that could be influenced was not known.
The business, boasting a market cap of $1.78tn thanks to their investments into cloud computing, is set to announce their second-quarter earnings next week.
It is probable that a declaration concerning personnel cuts will be confirmed before Satya Nadella, Microsoft’s chairman and CEO, notifies investors of its financial results on January 24.
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Recently, a number of high-tech corporations have taken drastic steps, with Amazon announcing its intention to lay off 18,000 employees, or 6% of its personnel, this month.
The organization that provides cloud software, Salesforce, has announced that it will be reducing its staff by 8,000 members, while Meta, the proprietor of Facebook, has revealed that it is planning on cutting 11,000 positions.
In light of a worldwide economic downturn, massive tech businesses had to act, bringing in tens of thousands of new workers during the pandemic.
Investors will be given the latest update on Microsoft’s financial performance from Satya Nadella next week.
Owned by Elon Musk, Twitter has made the choice to reduce its workforce by thousands of employees, and HP has also dismissed 6,000 of its staff.
In October, Microsoft pointed out that its cloud computing service had experienced a decrease in demand, due to firms re-assessing their expenditures in the context of current economic struggles.
Mr Nadella proclaimed in October that in a world encountering more and more difficulties, digital technology serves as an invaluable aid.
In this atmosphere, we strive to aid our patrons in achieving greater results with fewer resources, while investing in areas of long-term development and controlling our expenses within a defined framework.
Under the guidance of Mr Nadella, the organization has undergone a major shift, but its profits have been negatively influenced by the strong value of the dollar in recent fiscal periods.
The company is also facing a struggle to receive authorization from regulators for their £56bn acquisition of Activision Blizzard, the developer of the popular video game Call Of Duty.
Investors were taken aback when the firm purchased a £1.5bn share in the London Stock Exchange’s proprietor as part of a cloud computing agreement that extends over a long period of time.
It is anticipated by Microsoft that they will be able to make $5bn throughout the duration of the agreement.
In advance of their upcoming earnings report, Microsoft’s stock has been downgraded to a sell rating by Guggenheim analysts, who believe the figures may not meet the expectations of investors.
Investors in general tend to perceive Microsoft as a giant and dependable enterprise that can handle any crisis, but there are certain areas of vulnerability that this current economic downturn may further worsen.
A spokesperson from Microsoft replied to Sky News’ inquiry by stating that they “do not comment on any rumors or speculation”.