Microsoft Corp. (NASDAQ:MSFT) has reportedly carried out another round of layoffs, affecting various teams and regions. The company has not disclosed the exact number of employees impacted.
What Happened: The layoffs have affected employees in roles related to product and program management, as per LinkedIn posts from the affected staff. The company, however, has not revealed the number of employees affected, reported GeekWire.
A Microsoft spokesperson stated, "Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners."
Microsoft's financial year 2024 concluded on Jun. 30. The company often restructures its business at the beginning of a new fiscal year.
This is the third round of layoffs by Microsoft in 2024. In June, the company cut around 1,000 jobs across various units, including its Azure cloud unit and HoloLens mixed-reality organization. Earlier in the year, Microsoft laid off nearly 2,000 employees in its gaming unit, following its $69 billion acquisition of Activision Blizzard.
Microsoft is making these cutbacks to maintain its profit margins amid increased capital spending, aimed at providing the cloud infrastructure required for AI applications.
Microsoft's workforce expanded during the pandemic but has stabilized over the past two years. As of the end of 2023, the company employed approximately 227,000 people worldwide, down from 232,000 the previous year, according to the report.
Microsoft did not immediately respond to a request for comment from Benzinga.
Why It Matters: The recent layoffs at Microsoft are part of a broader trend in the tech industry, where companies are making significant workforce reductions to streamline operations and cut costs.
For instance, Tesla Inc. led 2024 U.S. tech layoffs, reducing its workforce by at least 14% this year. Similarly, Meta Platforms Inc. has also implemented job cuts as part of its "Year of Efficiency" goals.
Moreover, Alphabet Inc.'s Google recently eliminated approximately 200 jobs and relocated some roles to India and Mexico as part of its cost-cutting measures. These moves reflect a broader industry trend where tech giants are focusing on efficiency and profitability amid economic uncertainties.
Microsoft's layoffs also come at a time when the company is investing heavily in AI applications, which require substantial capital spending. This strategy is aimed at maintaining profit margins while navigating the challenges of a rapidly evolving tech landscape.
The tech industry has seen a wave of layoffs in 2024, with companies like FedEx Corp. (NYSE:FDX) also announcing job cuts as part of their financial strategies.
Price Action: Microsoft stock closed at $460.77 on Wednesday, up by 0.32% for the day. In after-hours trading, the stock was down 0.21%. Year to date, Microsoft's stock has seen a 24.24% increase, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote