Image Source : UNSPLASH Microsoft will spend $1.2 billion in Q2 for severance costs, among other things.
Microsoft, one of the world’s leading tech giants, has announced that it will cut nearly 10,000 jobs from its engineering division. This move comes as the company joins a growing list of tech companies that have recently laid off employees.
In a blog post, CEO Satya Nadella stated that the company would continue to invest in strategic areas for the future, meaning they will allocate capital and talent to secular growth and long-term competitiveness for the company while divesting in other regions.
The CEO also added that treating employees with dignity was a top priority. The company will spend $1.2 billion in Q2 for severance costs, among other things. US-based employees will receive benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice before termination.
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This decision, however tough, is necessary for the company’s growth and progress, according to Nadella. According to him, Microsoft’s success must be compatible with that of the entire world. To produce meaningful innovation that customers, communities, and nations can actually benefit from, every team across the organisation must raise the bar and outperform the competition.
The company’s move to let go of 10,000 employees through March 31 results from slower revenue growth. The company will take a $1.2 billion charge in the second quarter of its fiscal year, which will reduce earnings per share by 12 cents. This action is not unique to Microsoft. Employees have recently been laid off at Salesforce, Amazon, and other tech behemoths like Alphabet.
ALSO READ: Tech industry in turmoil: Layoffs on the rise as companies struggle to stay afloat
FAQ
Q: How many jobs is Microsoft cutting?
A: Microsoft is cutting nearly 10,000 jobs from its engineering division.
Q: Why is Microsoft cutting jobs?
A: According to CEO Satya Nadella, the business is adjusting to invest in strategic areas for the future, which entails allocating resources and talent to industries with long-term growth potential and competitiveness for the business while selling off others.
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