Microsoft is reportedly slashing four per cent of its global workforce. On Wednesday, July 2, the tech giant said that it was laying off around 9,000 of its employees from across different teams. These layoffs are being carried out across nations, and reportedly professionals of all levels of experience are bracing for impact. Microsoft usually introduces structural changes during the end of the new fiscal year; however, this time it has announced the development on the second day of the month.
According to a report in CNBC which cited a Microsoft spokesperson, the company said that it will continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace. This year the tech giant has been announcing layoffs successively; in January it announced that it was planning to cut one per cent of its staff based on their performance.
In May, the software giant axed over 6,000 jobs and some 300 more in June. Similarly, in 2023 the company laid off 10,000 employees. Considering the company’s back-to-back major layoffs, the 50-year-old tech giant is making concerted efforts towards reducing its headcounts. Reportedly, this is the company’s second largest mass layoff after it slashed nearly 18,000 jobs in 2014.
While there are no reasons explicitly cited, it is believed that coding assistants, which is the fastest-growing segment this year, could be one of the potential reasons. Google recently launched its own version, and even though Microsoft is yet to announce that they are launching a similar product, they are reportedly changing internal workflows around these tools. In simple words, these coding assistants mean the companies are adopting automation and AI-driven efficiency in the software development process.
As of now, companies like Microsoft and Google are leading when it comes to spending on AI research and development. In essence, they are witnessing their developer roles evolve rapidly. Most of these coders are likely to be affected by this restructuring as AI tools begin to take over some of the traditional tasks.
Microsoft’s stock, which is down in Wednesday’s premarket trading, is still up 16 per cent year-to-date and a massive 150 per cent over the past five years. The tech giant seems to be leading by example. The layoffs come at a time when Meta is aggressively hiring talent; it has reportedly invested $3 billion to bring in the most capable AI researchers, which is a major acquisition in itself. Most big tech companies seem to be working towards attracting the smartest AI talent, even at the cost of restructuring their existing resources and related costs.
