Satya Nadella-led Microsoft has announced that it will cut 6,000 or 3% of its workforce globally, which will affect thousands of employees at several key positions across all levels, teams, and geographies. According to the data until June 2024, the tech giant employed 228,000 workers. The company aims to slash management layers and streamline operations, as per The Times of India report.
A Microsoft spokesperson, in an interview with CNBC, said that organisational changes are necessary for the company to succeed in a dynamic marketplace. This is the tech giant's largest job cut this year since firing 10,000 roles in 2023. The company said that these layoffs are structural in nature.
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These layoffs by Satya Nadella's company may affect middle management roles as the company seeks to create a more streamlined hierarchy by increasing each manager's "span of control." Earlier, it was reported that it aims to provide engineering talent as it continues investing heavily in artificial intelligence (AI) imitation.
As per the Business Insider report, the sacked employees will be on the payroll for a period of 60 days from the day of sacking. They will also be given eligible rewards and bonuses. The company also implemented a two-year rehire ban for employees forced out due to performance issues.
Microsoft is reportedly focusing on reducing its "PM ratio" — the proportion of managers to engineers — across teams. Similar strategies have been implemented at other tech giants, including Amazon and Google, where the top layer of the hierarchy were let go. Meta is also expected to let go off several thousand employees this year, as CEO Mark Zuckerberg pushes for a “year of efficiency.”