Microsoft says it will let go of more failing workers


Microsoft is preparing to initiate another round of layoffs, with the company targeting underperforming employees as part of its broader strategy to maintain a high-performance workforce. Sources familiar with the situation revealed that the job cuts will primarily affect employees who have not met performance expectations. While the company has confirmed the layoffs, it has not disclosed the exact number of employees who will be affected by this move.

A spokesperson from Microsoft acknowledged the upcoming layoffs and reiterated that the company remains focused on building and retaining high-performance talent. The spokesperson stressed that when employees fail to meet expectations, appropriate actions, including layoffs, are taken to maintain the company's commitment to excellence. The layoffs are expected to impact a range of departments across the organization, including the company’s critical Security division. Microsoft’s proactive approach aims to ensure that its workforce continues to align with its overall goals of growth and innovation.

As part of its restructuring process, Microsoft evaluates employee performance at various levels, including senior employees at level 80. This performance-based approach ensures that only those who meet or exceed expectations remain in their roles, while those who do not are let go. The vacancies left by these layoffs are often filled by new hires, suggesting that Microsoft's overall headcount may not drastically change despite the reductions. As of mid-2024, Microsoft had a global workforce of approximately 228,000 employees, and the company’s strategic focus on high performance suggests that this number could fluctuate based on ongoing evaluations.

This move is consistent with Microsoft’s long-standing history of workforce restructuring, a practice that has been a key feature of the company’s operations since Satya Nadella took over as CEO in 2014. Under his leadership, Microsoft has undertaken several rounds of layoffs to optimize its workforce and adapt to changing market conditions. In 2014, shortly after Nadella's appointment, the company carried out a significant restructuring, cutting 18,000 jobs, which represented nearly 14% of its total workforce at the time. Since then, Microsoft has continued to adjust its workforce, focusing on innovation and efficiency.

In recent years, Microsoft has made additional strategic job cuts across various sectors. In 2023, the company let go of approximately 10,000 employees across different divisions, including Xbox. Following its high-profile acquisition of Activision Blizzard, Microsoft laid off around 2,000 employees from its gaming division in early 2024. These cuts were part of the company's efforts to streamline its operations and improve the financial performance of its gaming segment.

In the summer of 2024, Microsoft implemented further layoffs, affecting around 1,000 people in its Azure cloud services division. This restructuring within its cloud division reflects the company's drive to remain competitive in the rapidly evolving cloud services market while ensuring that it has the right talent in place to meet the growing demands of the industry.

The most recent round of job cuts occurred in September 2024, when Microsoft laid off 650 employees from its Xbox division. This brought the total number of job cuts within the gaming segment to nearly 3,000 for the year. The layoffs reflect Microsoft’s ongoing efforts to refine its workforce and align it with strategic goals, particularly in the face of growing competition and changing consumer demands in the gaming industry.

Despite the job cuts, Microsoft has emphasized that it remains committed to investing in its most critical areas of growth, such as its cloud services, artificial intelligence, and security divisions. As the company continues to focus on long-term sustainability and innovation, these layoffs are seen as part of a broader strategy to ensure that Microsoft remains agile and positioned for future success in an increasingly competitive and dynamic market.

While the layoffs may be difficult for the affected employees, the company has expressed confidence that this restructuring will ultimately benefit both Microsoft and its remaining workforce. By focusing on high-performance talent and strategically optimizing its departments, Microsoft aims to maintain its leadership position in the tech industry while fostering innovation and growth across its core business units.


 

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