Microsoft cuts jobs in ‘strategic realignment’ as new fiscal year begins

Microsoft’s corporate headquarters in Redmond, Wash. (GeekWire File Photo)

Microsoft confirmed a “small number” of job cuts Tuesday morning, describing the move as part of a “strategic realignment” in specific areas of the company, and saying it plans to keep growing its overall headcount.

The cuts, coinciding with the July 1 start of the company’s 2023 fiscal year, impact less than 1% of Microsoft’s workforce, but at 181,000 employees worldwide, that still translates into hundreds of people, at least.

“Today we notified a small number of employees that their roles have been eliminated,” a Microsoft spokesperson said in a statement. “This was a result of a strategic realignment, and, like all companies, we evaluate our business on a regular basis. We continue to invest in certain areas and grow headcount in the year ahead.”

Bloomberg News reported that the cuts “spanned a variety of groups including consulting and customer and partner solutions and were dispersed across geographies.”

The latest cuts aren’t as deep as the thousands of positions eliminated by Microsoft in 2017, or the 5,000 layoffs announced by the company in 2009.

Research firms IDC and Gartner this week reported steep declines in PC shipments in the second quarter, which is likely to impact Microsoft’s traditional Windows business.

The company’s steady expansion into cloud computing and online services has given it a significant cushion against fluctuations in the PC market. However, broader concerns about the direction of the global economy also have the potential to impact discretionary corporate IT spending in the year ahead.

Microsoft reports its fiscal fourth-quarter and annual financial results later this month. Analysts expect the company to report quarterly revenue of $52.5 billion, up nearly 14%, and earnings of $2.30 per share, vs. $2.17 a year ago.

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The company’s shares are down nearly 3% on news of the cuts, trading around $257 as of publication time.

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