Citing growing recession fears, Microsoft's (MSFT) CEO Satya Nadella told employees that the software giant was making the "difficult" decision to eliminate 10,000 jobs.
Nadella told employees in a Jan. 18 company blogpost that the Redmond, Wash., company co-founded by Bill Gates was eliminating 5% of its workforce to respond to the global economic slowdown.
"These decisions are difficult, but necessary," Nadella said. "They are especially difficult because they impact people and people’s lives – our colleagues and friends."
While companies increased their digital spend during the pandemic, he said, they are now doing more with less, as "organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one."
"At the same time, 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," Nadella said.
Although the company is eliminating roles in some areas, Microsoft will continue to hire "in key strategic areas."
Nadella Says It's 'Showtime' for Microsoft
Nadella said the company "will treat our people with dignity and respect, and act transparently."
"When I think about this moment in time, the start of 2023, it’s showtime – for our industry and for Microsoft," Nadella said. "As a company, our success must be aligned to the world’s success.
"That means every one of us and every team across the company must raise the bar and perform better than the competition to deliver meaningful innovation that customers, communities, and countries can truly benefit from," he added.
In response to economic worries, tech companies are slashing costs, including through waves of job cuts.
Facebook parent Meta Platforms (META) cut 11,000 jobs, a first since the social-networking giant started up in 2004. E-commerce giant Amazon (AMZN) said it would eliminate more than 18,000 jobs.
Earlier this month, the world's biggest enterprise software company, Salesforce (CRM), also unveiled plans to cut around 10% of its global workforce amid a restructuring strategy under stand-alone CEO Marc Benioff.
Microsoft is scheduled to publish earnings for the three months ending in December, its fiscal second quarter, on January 23.
