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Microsoft Lays off Employees as Earnings Growth Slows Down

Industry: Software
Current: Company Performance

The software company revealed in July 2022 that it would eliminate several positions that made up less than 1% of its staff
When the reductions were announced, Microsoft said that they were part of a routine adjustment at the beginning of its fiscal year
On October 17, 2022, the corporation did not specify how many layoffs would begin in the third week of October 2022, and it was unclear whether the planned layoffs would also occur

Microsoft Corp. Eliminates Several Roles

Microsoft Corp. increased its layoffs in the third week of October 2022, becoming the latest tech company to voice concern about future demand. In July 2022, the software developer announced that it intended to eliminate several roles, accounting for less than 1% of its workforce. Microsoft, which has more than 200,000 employees, claimed at the time that the reductions were part of a routine adjustment at the beginning of its fiscal year.

The number of layoffs that began in the third quarter of October 2022 was not specified by the corporation on October 17, 2022, and it was also unclear if they were a result of the previously disclosed intentions. There was a significant decline in the number of active jobs in October 2022 over that in September 2022, according to GlobalData.

Digital companies such as Twitter Inc., Netflix Inc., and Uber Technologies Inc., modified their recruitment strategies in response to slower growth and other macroeconomic factors. The companies have been reducing the number of employees, shrinking some teams, and halting hiring.

Years of rapid recruitment in the computer sector are coming to an end as the free money that supported years of expenditure runs out. Parts of the formerly brisk industry have become cooler due to the reversal of some pandemic patterns, inflation, and growing anxiety that the world economy could be going into a recession.

The latest action by Microsoft comes after some difficulties for the company. There was a significant increase in the total revenue and net profit of Microsoft in 2022 in comparison to that in 2021, according to GlobalData.

In the three months leading up to June 2022, the company experienced its worst earnings growth in two years due to a slowdown in its cloud business, falling gaming sales, and the consequences of a strong currency. As has happened with the tech-heavy Nasdaq Composite Index in 2022, Microsoft shares fell over 30% so far.

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