Microsoft CEO Satya Nadella confirmed in a message to employees that the company will lay off about 10,000 people by March 31, 2023, which is approximately 5% of Microsoft’s total workforce.
Excerpt from Satya Nadella’s letter:
First, we will align our cost structure with our revenues and the demand we see from our customers. Today, we are making changes that will result in a total headcount reduction of 10,000 jobs through the end of the third quarter of fiscal 2023. This represents less than 5 percent of our total workforce and some layoffs will occur today. It is important to note that, despite the reduction in positions in some areas, we will continue to hire staff in key strategic areas. We know that this is a difficult time for every person who has been made redundant. I and the senior management of the company are confident that during this process we will act as thoughtfully and transparently as possible.
In the second quarter of fiscal year 2023, Microsoft will assume $1.2 billion in expenses related to “severance payments, changes to the hardware mix, and rental consolidation costs.”
Eligible U.S. employees will receive “above-market severance pay, six months of uninterrupted medical care, six months of equity retention, career reassignment services, and will be given 60 days prior notice, regardless of whether such notice is required by law.
Note. The fiscal year is not the same as the calendar year. In the US, the fiscal year starts on July 1 and ends on June 30.