11th December 2023 6:10 pm
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Microsoft could cut thousands of jobs from two divisions

  • Tech giant Microsoft could be looking to cut thousands of jobs in its engineering and human resources divisions.
  • While no official confirmation has been released, reports indicate that 11 000 jobs could be on the cutting block.
  • In South Africa, Microsoft’s Johannesburg office has a workforce of around 500 and it is not yet known if any of these jobs will be affected.

Last year saw the beginning of sweeping cost-cutting efforts across the technology industry worldwide as companies began curtailing their over-optimistic growth predictions at the tail end of the pandemic. Most of these efforts culminated in job cuts and hiring freezes.

Giants like Amazon, Meta, Twitter and many others axed thousands of employees. Over 120 000 tech workers were laid off in 2022.

Today, Reuters reported that Microsoft, with 221 000 full-time employees worldwide, was looking to begin making cuts of its own. It is believed that its human resources and engineering divisions will see most of the cuts.

Last year, Axios reported that the Washington-based company cut 1 000 jobs across various levels, teams and different parts of the world.

Outside of the US, the company has 99 000 employees. In South Africa, Microsoft’s offices in Johannesburg house around 500 employees who are able to enjoy “great coffee, a gym, various game rooms, and other amenities.”

It is unknown how many South African employees will be affected by the layoffs.

Citing its sources, Sky News says that Microsoft will be looking at cutting 5 percent of its workforce, which would equate to 11 000 full-time jobs. However, this figure has not been verified, and in fact, it is believed that cuts could be even higher.

It is important to note that no official confirmation from Microsoft has yet to be released.

The latest round of alleged cuts stems from newfound pressure at Microsoft for its Azure cloud unit to see continued growth, and on the back of a worldwide downturn of the PC market after record buying seen during the height of the pandemic, especially in 2021.

“2021 was near historic levels for PC shipments, so any comparison is going to be distorted. There’s no question when we look back at this time that the rise and fall of the PC market will be one for the record books, but plenty of opportunity still lies ahead,” explained Ryan Reith, group VP with IDC’s Worldwide Mobility and Consumer Device Trackers in a Gartner report released on 12th January.

“The enterprise PC market is also being impacted by a slowing economy,” explained Mikako Kitagawa, director analyst at Gartner.

“Enterprise buyers are extending PC lifecycles and delaying purchases, meaning the business market will likely not return to growth until 2024,” Kitagawa added,

Microsoft is expected to report its second-quarter earnings next week.

[Image – Photo by Matthew Manuel on Unsplash]

Luis Monzon

Luis Monzon

Journalist. Covering education, AAA gaming and consumer tech. Reach me at Luis@htxt.co.za.

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