While We Are Eliminating Roles In Some Areas, We Will Continue To Hire In Key Strategic Areas: Microsoft CEOMicrosoft would reportedly reduce its workforce by 5%, or about 10,000 employees this financial year

Microsoft Corp, on Wednesday, has reportedly announced that it would reduce its workforce by 5%, or about 10,000 employees this financial year to deal with the technological sector's gloomy outlook.

In an internal mail to the employees, Microsoft's CEO and chairman Satya Nadella said that Microsoft will emerge from this economic uncertainty but also opined that it requires the company to take actions grounded in three priorities.

"First, we will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5% of our total employee base, with some notifications happening today," read the letter.

The letter further mentioned that customers are now optimizing their digital spend, organizations are exercising caution and the next major wave of computing is being born with advances in AI.

"It's important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible," Nadella wrote, while prioritizing the company's strategic plan of action.

Furthermore, the company shared its plans to invest in strategic areas for the future, by allocating both capital and talent to areas of secular growth and long-term competitiveness for the company, while divesting in other areas.

As per Nadella's words, "These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn't adapt to platform shifts. As such, we are taking a $1.2 billion charge in Q2 related to severance costs, changes to our hardware portfolio, and the cost of lease consolidation as we create higher density across our workspaces."

The third priority, according to the letter, will be treating these people who will be losing jobs with respect and transparency. "These decisions are difficult, but necessary. They are especially difficult because they impact people and people's lives – our colleagues and friends. We are committed to ensuring all those whose roles are eliminated have our full support during these transitions. US-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days' notice prior to termination, regardless of whether such notice is legally required. Benefits for employees outside the US will align with the employment laws in each country," said Nadella.