Microsoft's major layoffs prove that no tech giant is safe from the market downturn

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Microsoft’s major layoffs prove that no tech giant is safe from the market downturn

 

A famous trillion dollars Tech giant can face huge layoffs and can be hit as hard. Microsoft is one the tech giant who faced major layoffs. On Wednesday, Microsoft announced to cut off 10,000 job positions or 5% of its staff immediately. This happens after massive layoffs at Salesforce, Amazon, and Meta earlier this month. It indicates that the market collapse will probably affect all of the major IT companies. Another round of layoff may be faced by Microsoft, Salesforce, and other tech companies by customers’ reductions in IT spending.

An analyst at Wedbush, Dan Ives said after a decade of fast growth now major layoffs have been faced by tech firms. This is due to the inflation and rising interest rates.  He called it a “rip of the band-aid moment to protect margins and cut costs”. This strategy will help tech companies to survive in the ongoing downturn and emerge on the top. Microsoft uses this strategy and continues to invest in the innovation growth area like “cloud, M&A (Activision), key innovation bets (ChatGPT) rather than non-strategic areas like hardware, etc.

Microsoft states the fact that both tech firms, Google and Apple has successfully escaped from ongoing massive layoff cycle. This is due to current recruiting ban by Apple and may be carried out until September. Whereas Google’s parent firm Alphabet did experience layoffs but Google itself hasn’t faced.

RBC analysts recommended C-suite leaders to lower their sales expectations. Because future revenue projections are unpredictable so they advise leaders to “take a realistic picture” of their sales.

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