Microsoft is preparing to cut thousands of jobs in the latest move by one of the world’s biggest technology companies to reduce its workforce as the global economy slows.

The US software giant could announce plans to ax a significant number of posts worldwide within days, Sky News has learned.

MicrosoftWhich employs more than 220,000 people, including 6,000 in the UK, is said to be looking at cutting around 5% of its workforce, which would equate to around 11,000 jobs if true.

The figure could not be confirmed Tuesday evening, and one analyst suggested Wall Street would be surprised if the figure wasn’t higher.

It was also unclear how many UK-based positions could be affected.

The company, which has bet big on cloud computing growth and now has a market value of $1.78tn, is due to report second-quarter earnings next week.

If finalized, an announcement about the headcount reduction is likely to come before Microsoft’s chairman and chief executive, Satya Nadella, updates investors on its financial performance on January 24.

In recent weeks, many big tech companies have wielded the axe, with Amazon revealing plans this month to cut 18,000 jobs, or about 6 percent of its workforce.

Salesforce, the cloud software provider, said it would cut 8,000 jobs, while Meta, the owner of Facebook, is reducing its workforce by about 11,000 roles.

Big technology companies have been forced to respond to signs of a global economic slowdown, with many hiring tens of thousands of additional employees during the pandemic.

Microsoft Chief Executive Officer Satyanarayana Nadella
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Satya Nadella will update investors on Microsoft’s financial performance next week.

Owned by Elon Musk, Twitter has also cut thousands of jobs, while 6,000 have gone to personal computer maker HP.

Microsoft warned in October of a slowdown in its cloud computing business, an acknowledgment that large corporate customers are reassessing spending in response to economic challenges.

“In a world facing increasing speed, digital technology is the ultimate tailwind,” Mr Nadella said in October.

“In this environment, we are focused on helping our customers maximize by investing in secular growth areas and managing our cost structure with discipline.”

The company has turned around under Mr Nadella’s leadership, although its earnings have been hampered by the strength of the dollar in recent quarters.

It is also battling with regulators to get approval for its £56bn takeover of Call of Duty maker Activision Blizzard.

Last month, it surprised investors by acquiring a £1.5bn stake in the London Stock Exchange owner as part of a long-term cloud computing partnership.

Microsoft expects revenue of $5bn over the lifetime of the alliance.

Ahead of its earnings next week, Microsoft’s stock was downgraded to a sell rating by analysts at Guggenheim, who argued that the data “could disappoint investors”.

“While most investors see Microsoft as a large stable business that can weather any storm, it has weaknesses, some of which could be exacerbated by this macro.[economic] Lazy,” he wrote.

Responding to inquiries from Sky News, a spokesperson said Microsoft “does not comment on rumor or speculation”.



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