Software giant Microsoft is likely to lay off thousands of employees across human resources and engineering divisions, according to multiple media reports on Tuesday. The latest layoffs shall come after Microsoft cut nearly 1,000 jobs in July 2022.

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It had then said, "Today we had a small number of role eliminations. Like all companies, we evaluate our business priorities regularly and make structural adjustments accordingly," adding that it would continue to invest in the business and grow its headcount overall in the year ahead.

Reflecting on the latest reports on Microsoft, Morningstar analyst Dan Romanoff said, "From a big picture perspective, another pending round of layoffs at Microsoft suggests the environment is not improving and likely continues to worsen."

The development comes at a time when the tech sector, including giants like Amazon and Meta, has been reducing its workforce in response to slowing demand in the face of a worsening global economic outlook.

According to a few users of Blind, a community app for the workplace, the latest round of layoffs could begin on January 18. About 6,000 people could be impacted in this round, a user cited a source, adding that the firm went for another job cut round in October 2022.

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However, UK broadcaster Sky News reported, citing sources, that Microsoft plans to cut about 5 percent of its workforce or about 11,000 roles.

The company plans to cut jobs in several engineering divisions on Wednesday, Bloomberg News reported. In contrast, Insider reported that Microsoft could cut recruiting staff by as much as one-third.

“Managers of impacted folks will be notified the previous day. HR will also provide talking points on how to handle impacted employees and how to talk to the team about it,” Blind user wrote.

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In a post five days ago, the user said, “This will be first mass layoff in history that’s directly the result of ChatGPT and AI. Not because it’s doing our job yet but because that $10B OpenAI investment had to come from somewhere. This also marks a massive shift in strategy for many groups in the company.”

As of June 30, 2022, Microsoft had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally.

Microsoft has not yet commented on the reports.

The firm is under pressure to maintain growth rates at its cloud unit Azure, after several quarters of downturn in the personal computer market hurt Windows and devices sales.

(With inputs from Reuters)

First Published:Jan 18, 2023 9:11 AM IST