Microsoft Cutting 10,000 Jobs Isn't Bad News: Expert

On Wednesday, Jan. 18, 2023, Microsoft announced it is cutting 10,000 employees over the next few months amid changes in consumer spending and economic uncertainty, Vox reported along with Mary Wang of National Public Radio (NPR).

Photo Insert: The Microsoft staff reduction comes at a time when it has plans to invest billions to develop artificial intelligence and video games.

The layoffs will impact about 5% of Microsoft’s workforce as the company adjusts to falling demand for digital services, Catherine Thorbecke and Hanna Ziady also wrote.

However, Microsoft cutting jobs is not a grim portent for the US economy. “I don’t think this is symptomatic of a bigger issue. This is more along the lines of a normalization,” noted Brad Reback, an analyst at the investment bank Stifel, in the New York Times.

Microsoft becomes the latest in a series of tech companies to order layoffs that reverse a pandemic-fueled hiring spree.

In recent months, Amazon, Salesforce, and Meta have cut thousands of jobs, Amanda Llewelyn of Recode reported, but the Microsoft staff reduction comes at a time when it has plans to invest billions to develop artificial intelligence and video games, Karen Weise reported for the New York Times. Vox’s Peter Kafka warns that the tech boom has turned into a bust, and Wall Street knows it.

Yet, the tech giant is expected to announce missed revenue targets after taking a $1.2 billion hit to its second-quarter earnings due to severance and consolidation costs, Tom Warren of The Verge stressed.

Despite the ongoing tech sector layoffs, the overall job market is still pretty strong: 223,000 jobs were added to the economy in December, according to the Bureau of Labor Statistics (BLS), Madeleine Ngo reported for Vox.

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