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Saturday, Jun 22, 2024

Microsoft 'cuts around 1,000 jobs' as big tech responds to tough global economy

Microsoft 'cuts around 1,000 jobs' as big tech responds to tough global economy

Financial analysts expect the pace of job cuts to increase across big tech as the effects of surging inflation globally hurt appetite for big investments.
Microsoft has admitted "structural adjustments" in the wake of a report suggesting the US tech firm had cut around 1,000 jobs this week.

The company, Axiom reported on Tuesday, wielded the axe across several divisions - building on a weaker pace of hiring across the sector this year in the face of surging inflation and stalling economic growth.

Big tech had been a big winner during the COVID pandemic as investor cash flooded into stocks which supported working from home and a new hybrid working future, for example.

They became known as 'growth stocks' and were, bar many healthcare and logistics shares, seen as the only game in town as lockdowns took hold and stifled activity as we knew it.

But the tech stocks soon came under pressure as consumer and business budgets were squeezed by the pace of price rises globally.

In the US, a strong dollar has also hammered the overseas earnings of multi-nationals because profits are squeezed when they are booked back at their respective American headquarters.

A Microsoft spokesperson said of the cuts: "Like all companies, we evaluate our business priorities regularly and make structural adjustments accordingly.

"We will continue to invest in our business and hire in key growth areas in the year ahead".

The lay-offs affected less than 1% of Microsoft's total workforce of around 221,000.

Meta - Facebook's owner - Twitter and Snap Inc have all cut jobs and scaled back hiring in recent months.

Microsoft shares have lost almost a third of their value over the course of the past year.
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