Microsoft joins the chorus of tech companies announcing layoffs

Big tech companies are slimming down.

Altogether, tech companies announced tens of thousands of layoffs last year.

Amazon, Salesforce, and Twitter are just some of the companies that have announced thousands of layoffs in recent weeks.

That fueled attention and speculation surrounding Microsoft’s plans. And Wednesday morning, Microsoft CEO Satya Nadella confirmed that the company would also be making significant layoffs.

Nadella sent out a message to his employees. It reads, in part:

“Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3.” According to the Washington State Employment Security Department, almost 900 of those layoffs will be in Redmond, Bellevue, and Issaquah.

Those layoffs are a big deal — they amount approximately 5% of the company's workforce, said Karen Weise, a Seattle-based technology correspondent for the New York Times, covering Amazon and Microsoft.

Microsoft is seen as a pretty stable tech company, Weise added.

"It's leadership has a really good reputation in terms of just running a really strong business."

Microsoft grew by roughly 75,000 employees during the pandemic. And like many tech companies, the business was hoarding talent.

"There was so much demand for tech and cloud computing and online services, online shopping, all of this, that companies would just kind of hire and hire, to make sure they have the resources they need," Weise said.

Now that the demand has come down, these companies are dealing with the "overhang" — the people they hired to meet it.

"I think it'll be interesting to see if any pattern emerges for parts of the business that are cut dramatically or entirely," Weise said. "This is kind of this period in transition, and companies are trying to make sense of it. So I think there are just a lot of moving pieces right now."