Microsoft Cutting Jobs as Recession Fears Mount

A Microsoft logo in Los Angeles, Calif., on June 14, 2016. Lucy Nicholson/Reuters

Microsoft is laying off additional workers following a declining pace of revenue from software products, in a move adopted by several technology companies lately to curb costs as recession looms ahead.

“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” a Microsoft spokesperson told multiple media outlets. “We will continue to invest in our business and hire in key growth areas in the year ahead.”

Although the company has refused to reveal the exact number of jobs cut, media outlet Axios estimates the number to be less than 1,000. Layoffs have occurred across levels, teams and global offices of Microsoft, including Xbox and Edge divisions.

There is a 100 percent chance of the U.S. economy going into recession during the next 12 months, according to a model projection from Bloomberg Economics.

While President Joe Biden believes that a downturn will not happen and that there is only a prospect for a “slight recession,” 98 percent of C-suite executives said they’re preparing for a recession in the 12 to 18 months.

“Microsoft has started layoffs today. I’m hearing some in Experiences + Devices, Xbox, legal, strategic tech positions, and elsewhere are impacted. The layoffs impact less than 1,000 employees, but some veterans and truly talented teams are impacted,” noted Tom Warren, editor at The Verge, in a tweet, resharing tweets from some of the discharged Microsoft employees.

“Welp, who’s got two thumbs and just got laid off from Microsoft this morning? 2022 has been quite a year,” said KC Lemson, former Microsoft program manager. She had been working with the company since June 2013.

It’s not confirmed whether the recent layoffs are part of the company’s July announcement when it said that it will be letting go of less than 1 percent of the staff. Microsoft’s quarterly revenue has been growing its slowest in during the past five-plus years. The company is set to announce earnings on Oct. 25.

Big Tech Layoffs

From the beginning of the year, more than 44,000 workers in the U.S. tech sector have been laid off in mass job cuts, according to a Crunchbase News tally.

Some of the companies include Better, with 5,000 workforce reductions; Netflix, with 480; Peloton, 4,084; Snap, 1,280; Shopify, 1,000; Coinbase, 1,100; GoPuff, 1,950; Beyond Meat, 240; Robinhood, 1,013; Noom, 1,095; and several others with an “unclear” number of layoffs.

Companies have given various reasons for culling a mass of employees, such as the COVID-19 downturn, dwindling valuations, difficulty raising capital, and rapid growth following the pandemic.

As for Microsoft, its layoff timing was questioned. “Microsoft managed to navigate 2013–21 with almost no mass layoffs impacting software engineering (save for a 2016 one, where they let SDETs go). Instead, they moved headcount around, and had people move to more strategic areas. Which is why layoffs are surprising this time,” said tech newsletter writer Gergely Orosz.