Microsoft is cutting 158 jobs in Washington State, a move that is not part of the 10,000 layoffs announced earlier this year.
The tech company is reducing 158 jobs in the Redmond area, according to a new filing with the state Employment Security Department (ESD) in the US.
The layoffs are part of a larger effort to reorganize and streamline the company’s workforce.
In a statement, a Microsoft spokesperson said that workforce adjustments are a necessary part of managing the business, and that the company will continue to prioritize and invest in strategic growth areas.
Microsoft has previously declared that it would eliminate 10,000 positions globally in order to simplify its activities and decrease expenses.
Consequently, the company has now carried out the layoffs, which have impacted over 2,700 employees in the Seattle region.
As of June 30, 2020, Microsoft had 221,000 workers, which represented a growth of 40,000 individuals, or 22% from the preceding year’s corresponding time frame.
In addition to the layoffs, Microsoft has also announced that it will not give any raise to salaried employees, including senior leaders, this year as global macroeconomic conditions continue to affect Big Tech.
In a memo to employees, CEO Satya Nadella said that only hourly workers will receive raises this year. However, salaried employees will still be offered bonuses and stock awards.
Microsoft announces 158 job cuts
Nadella told employees that Microsoft must maintain a leadership position in its at-scale businesses of today, generating enough yield to invest and lead in the next wave, while staying on the frontiers of both performance and efficiency.
Nadella mentioned that Microsoft is contributing to a significant transition towards AI in the current era, amidst a challenging and competitive environment, as well as global economic instability.
The move by Microsoft comes amid ongoing economic uncertainty caused by the COVID-19 pandemic. Big Tech companies have been hit hard by the crisis, with many facing declining revenues and profits.
However, some analysts believe that the sector will rebound quickly once the pandemic is under control. The impact of the recent layoffs at Microsoft and the decision not to offer salary raises to its employees could have several implications.
Firstly, the laid-off employees may face financial difficulties in the short term and may struggle to find new jobs in a tough job market.
This could have a ripple effect on the local economy, as unemployed workers are likely to cut back on spending, which can hurt local businesses.
Secondly, the decision not to offer salary raises to salaried employees, including senior leaders, could have a negative impact on employee morale and productivity.
Employees may feel undervalued and demotivated, which could lead to lower engagement and job satisfaction. This could in turn impact the company’s overall performance and ability to attract and retain top talent.
However, Microsoft has stated that it will still offer bonuses and stock awards to its salaried employees, which could help to offset the impact of the decision not to offer raises.
In addition, the company has emphasized that it will continue to prioritize and invest in strategic growth areas for its future, which could create new job opportunities and drive long-term growth.
The impact of these recent developments at Microsoft is likely to depend on how the company manages the fallout from the layoffs and communicates its strategy to its employees and stakeholders.
Overall, Microsoft’s job cuts and salary freeze are part of a broader effort by the company to stay competitive in an increasingly crowded and competitive market.
The tech giant is facing increasing competition from rivals like Amazon and Google, as well as from startups and smaller players in the industry.
As such, Microsoft is looking to streamline its operations, reduce costs, and focus on key growth areas to maintain its position as a leader in the industry.
