I reported yesterday about a report from Sky News regarding an impending Microsoft layoff. Unfortunately, that report was true as the company announced today to its employees about the upcoming job cuts.
Details About The Microsoft Layoff
Microsoft’s CEO, Satya Nadella, announced today to all Microsoft employees the reason for the layoff: “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.” Thus, the rapid expansion by many Silicon Valley companies during the Pandemic continues to cause problems. As those companies thought the higher-than-average usage and spending by its customers would last. Even if there wasn’t a recession in parts of the world currently, or an upcoming one in other countries, I expected usage and demand to return to normal levels. Because people would return to “normal” life once the lockdowns ended.
Another reason Nadella gave his employees for the Microsoft layoff was the improvements in Artificial Intelligence (AI): “…The next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.” Thus, the company believes it needs to refocus its efforts and spending on capitalizing on AI. In turn, some job duties and/or departments are no longer needed.
How Many Employees Will Lose Their Jobs?
Per the announcement 10,000 employees will lose their job at the end of March 2023. Some notifications go out today, as other employees will receive their notifications about their job loss later. Bloomberg reports the divisions seeing the biggest employee cuts are Bethesda Game Studios, 343 Industries, and HoloLens.
Will They Receive A Severance Package?
Yes! And it’s a pretty good one in my opinion. According to the announcement: “U.S.-benefit-eligible employees will receive a variety of 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 prior to termination, regardless of whether such notice is legally required. Benefits for employees outside the U.S. will align with the employment laws in each country.”
So at least in the U.S. those affected employees will get a great package. The only thing missing is how much actual severance pay the employees will get. However, that information will be provided later as it usually focuses on time with the company and the employee’s current salary.