Announcing yet another layoff in the tech sector, Microsoft is letting go of around 2.1 per cent of its workforce, which is roughly 4,800 jobs. ,
The decision comes after the tech giant is restructuring its commercial and Xbox businesses. During the early trading sessions, the company's shares were down 1.5 per cent. With the announcement, Microsoft joined other tech leaders in a wave of layoffs as they shift their priorities towards AI infrastructure.
As per Reuters, in a memo to employees, Chief People Officer Amy Coleman said AI was changing how work gets done by automating some routine tasks, but said the layoffs were part of a broader effort to realign resources and operating structures with the company's priorities. "I also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what is true is that AI is changing how work gets done."
Previously, Microsoft offered voluntary buyouts to about 7 per cent of its U.S. workforce, which is about 9,000 employees. Amazon and Meta platforms have also laid off thousands of employees this year.
It has also been reported that Xbox, the gaming division of the firm, will need a restructuring as its profit margin has slumped 3 per cent. Reuters reported that a surge in memory chip prices driven by data center demand has forced the software firm to raise Xbox console prices at a time when demand for the console was already soft.
"Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time," Asha Sharma, the gaming division's head, said in a memo to employees.
