Microsoft is gearing to streamline its operations, eliminate management hierarchies, cut costs and restructure. Reorganisation of certain internal teams is already underway. This exercise will come at the cost of what is probably the biggest round of job cuts at the company in over two years. Yes, Microsoft is preparing to let go three per cent of its global workforce. That means about 6,000 employees may be let go from various departments.
The job cuts will not spare LinkedIn either say media reports.
These job cuts, it is hoped, will help the company maintain its edge and position in a dynamic market in the long run.
The last round of layoffs at the tech major happened in early 2023, with 10,000 employees being impacted. In that round, the employees working on augmented reality (AR) headsets and certain hardware teams were affected.
With a global workforce strength of 2.28 lakh as of June of 2024, Microsoft is endeavouring to cut costs even while increasing spend on cloud services and artificial intelligence (AI) infrastructure. Additionally, the tech giant has ambitious plans to invest about $80 billion on data centres that support Azure and AI-driven offerings. Clearly, these layoffs are not triggered by any financial stress. In fact, the company reportedly calls these eliminations a part of a strategic restructuring or realignment for sustainability in the future.
Quite recently, Microsoft was in the news for having given employees a five-day deadline to accept its newly- introduced performance-management policy or opt for a voluntary exit. This is the company’s strategy to promote high performance and accountability across teams. The updated policy introduced stricter performance benchmarks and consequences. Employees were told that those flagged with poor performance ratings—categorised as zero or 60 per cent rewards—would face immediate restrictions.
