Microsoft Chairman and CEO Satya Nadella speaks during a press conference at the company’s campus in Redmond, Washington, on May 20, 2024.
Jason Redmond | AFP | Getty Images
microsoft The company confirmed to CNBC on Wednesday that it is making a small number of job cuts across departments based on performance.
“At Microsoft, we are focused on great people,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “We are always committed to helping people learn and grow. When people are not performing, we take appropriate action.”
business insider It reported on its plans late Tuesday.
Less than 1% of the company’s workforce will be affected by the layoffs, said the people, who requested anonymity due to privacy concerns.
Microsoft had 228,000 employees at the end of June. Although the company’s net profit margin is nearly 38%, near its highest since the early 2000s, Microsoft’s stock has underperformed its peers last year, rising 12% compared to the Nasdaq’s 29% rise.
Microsoft’s latest job cuts are small compared to recent downsizing efforts.
The company will lay off 10,000 employees and consolidate lease contracts in early 2023. In January 2024, three months after completing its $75.4 billion acquisition by Activision Blizzard, Microsoft’s gaming division cut 1,900 jobs to reduce duplication.
As 2025 begins, Microsoft faces an even closer relationship with OpenAI, an artificial intelligence startup that the company has backed with more than $13 billion. The partnership boosted Microsoft’s market capitalization to more than $3 trillion last year.
Over the summer, Microsoft added OpenAI to its list of competitors. Microsoft CEO Satya Nadella used the phrase “cooperative tensions” when discussing his relationship with investors Brad Gerstner and Bill Gurley. podcast It was released last month.
On the other hand, the Microsoft 365 Copilot Assistant, which is powered by OpenAI technology, has not yet caught on in businesses. UBS analysts said in a note last month that they left Microsoft’s Ignite conference with the impression that Copilot’s rollout was “a bit slow/underwhelming.”
Microsoft still touts growth opportunities. Finance chief Amy Hood said in October that revenue growth from Microsoft’s Azure cloud would accelerate in the first half of this year as AI infrastructure capabilities improved.
clock: Microsoft plans to spend $80 billion on AI development this year
