Microsoft’s ‘realignment’ exercise results in 1% reduction in headcount

That the economic environment is unfavourable is clear now, with even Microsoft downsizing.

The tech major has cut 1,800 jobs as part of an endeavour to realign its business at the beginning of the new fiscal year. This ‘realignment’ exercise has affected one per cent of its workforce, including people in the consulting, customer and partner solutions departments across locations.

Although Microsoft has slowed hiring in various departments including its Teams, Office and Windows group, the Company has said that it will continue investing in the business and keep hiring for other departments and roles.

The tech firm maintains that these layoffs are not an outcome of the economic situation. It calls it a restructuring exercise in the larger interest of the Company.

The Company posted a 26 per cent YOY increase in cloud revenue, while overall revenue went up by $49.4 billion.

In the first week of July, Microsoft had revealed that it would hire fewer people than it had originally planned to in the second half of 2022 because it intended to reduce spending and have better control over finances, just like most other companies. It had then revealed its intention to focus on retaining the key employees amidst a tight labour market and that it would set aside a bigger budget for merit increments. It had almost doubled the budget for merit-based pay hikes.