Microsoft Reportedly Plans More Layoffs Amid Tech Sector Reorganization
Rumors are circulating that Microsoft is gearing up for another round of layoffs as the tech giant and other companies in the industry navigate a changing landscape through reorganization.
According to sources, Microsoft is expected to cut hundreds, if not thousands, of jobs in its Azure cloud sector, as reported by Business Insider.
Reports suggest that over 1,500 employees in the Azure for Operators organization have already been affected, with additional layoffs impacting the Mission Engineering sector.
Related: Microsoft Is Separating Teams From the Rest of Office 365
A Microsoft spokesperson shared with Reuters that “Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.”
The exact number of affected employees has not been publicly confirmed by the company.
In recent years, Microsoft’s Azure cloud business has seen significant growth, driven in part by its partnership with OpenAI, which was extended in January with substantial investment over the coming years.
Notably, Microsoft reported a 17% increase in revenue and a 23% increase in operating income in its Q3 fiscal 2024 earnings report, reaching $61.9 billion and $27.6 billion respectively.
“Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry,” said Satya Nadella, chairman and CEO of Microsoft.
Related: Microsoft Invests Billions in OpenAI, Creator of ChatGPT
As of March 31, 2024, Microsoft’s global workforce was estimated to be around 221,000 employees.
The company’s stock had risen by 23% over a one-year period as of the latest reports.
Google Joins the Trend with Cloud Division Layoffs
CNBC reported that Google’s parent company, Alphabet, has also initiated layoffs within its cloud division, affecting hundreds of employees based on internal documents.
Reflecting on the changes, a Google spokesperson told CNBC, “As we’ve shared before, we continue to evolve our business to meet our customers’ priorities and the significant opportunity ahead. We maintain our commitment to investing in areas critical to our business for long-term success.”
Recent layoffs at Google’s cloud division included both new hires and employees in the onboarding process, following previous cuts in April across real estate and finance departments.
“Throughout the second half of 2023 and into 2024, a number of our teams made changes to become more efficient and work better, remove layers, and align their resources to their biggest product priorities,” a Google spokesperson shared with Reuters.