Follow us on Telegram for the latest updates: https://t.me/mothershipsg

Microsoft is reportedly set to lay off 5 per cent of it's workforce on Jan. 19, before it announces its quarterly earnings next week, The Verge reported.

With a workforce of more than 220,000 employees, it is estimated that around 10,000 staff will be given the sack.

Bloomberg reported that the layoffs will be targeting Microsoft's engineering division.

In 2022, Microsoft cut 1 per cent of it's workforce, primarily affecting those in consulting and customer and partner solutions positions.

Bloomberg reported that this year's cuts will be "significantly larger".

Singapore cuts unclear

It is unclear whether Singapore-based positions will be affected.

Mothership reached out to Microsoft for comment.

It declined to comment on the matter.

A statement by Microsoft said: "Microsoft does not comment on rumours or speculation."

Preparing for slump ahead

The Business Times reported that Microsoft is forecast to post a sales gain of 2 per cent in the fiscal third quarter when it reports earnings on Jan. 24, which will be the slowest revenue increase since fiscal 2017.

Microsoft is the latest tech giant to scale back in view of a slump in demand and an expected global recession.

Microsoft CEO Satya Nadella warned of two years of challenges ahead for the tech industry in an interview with CNBC a few weeks ago.

“The next two years are probably going to be the most challenging,” said Nadella.

“We did have a lot of acceleration during the pandemic, and there’s some amount of normalization of that demand. And on top of it, there is a real recession in some parts of the world.”

In 2022, Twitter announced large-scale job cuts amidst Elon Musk's takeover, cutting almost 50 per cent of it's workforce.

Twitter's Singapore office was not spared, with staff laid off from various departments ranging from engineering, sales and marketing teams.

The trend of tech giants scaling back can be attributed to the "unusual and uncertain macroeconomic environment", as characterised in a statement from Amazon, a company that has cut 18,000 staff as of January 2023.

During the pandemic, tech companies underwent rapid hiring to facilitate the boom in demand for remote solutions.

Coupled with rising interest rates as controlled by the U.S. Fed and a predicted slump in demand, companies have resorted to cutting back employment to keep afloat.

Top image via Turag Photography on Unsplash