‘No job cuts’ at Microsoft Malta despite tech giant’s plan to reduce headcount by 10,000

There will be no job cuts at Microsoft Malta, said the firm, even as the US-headquartered big tech company is laying off thousands of workers in many of its departments and subsidiaries.

On 18th January 2023, Microsoft CEO Satya Nadella told the firm’s employees that the company would be “aligning our cost structure with our revenue and where we see customer demand … resulting in the reduction of our overall workforce by 10,000 jobs”.

The cuts are expected to be finalised by the end of the third quarter of the year.

Mr Nadella noted that the figure represents less than five per cent of Microsoft’s total headcount, adding that “while we are eliminating roles in some areas, we will continue to hire in key strategic areas”.

Tech publications are putting the percentage of workers expected to be laid off at around 4.5 per cent of the firm’s total number of employees.

“We know this is a challenging time for each person impacted,” he said. “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.”

Many of Microsoft’s divisions have been affected by the announcement, including LinkedIn, GitHub, and the Azure cloud services team.

Contacted by BusinessNow.mt to inquire whether the wave of cuts will affect the Maltese office, a representative for Microsoft Malta said that “there is no job streamlining happening at Microsoft Malta”.

“Basically, Microsoft do not have much more to share outside Satya Nadella’s announcement on this topic at the moment,” they said.

This year, Microsoft will be celebrating 20 years since it established a footprint in Malta, with the company’s representative saying that it will “continue to reinforce its commitment to Malta”.

The 10,000 workers being laid off from Microsoft are just some of over 100,000 which have been let go from the tech sector in what is still the mid-way point of the first quarter of 2023, according to Layoffs.fyi, a web application tracking job cuts in the tech sector.

Alphabet (the parent company of Google), Meta (parent of Facebook, Instagram, and WhatsApp), Amazon, Salesforce, DellIBM, Uber, Twitter, and a host of other tech firms have also announced plans to downsize.

However, an analysis by Business Insider found that many of these companies remain far larger than they were prior to the COVID-19 pandemic.

As for Microsoft, it is still expected to have over 200,000 employees, far more than the 163,000 it had in 2020.

The reasons for the industry-wide layoffs are several, but are widely understood to mainly be related to the tech sector’s rapid growth during the pandemic as consumer spending shifted online.

As travel reopened and online spending went down, tech firms have seemingly found themselves with an oversized workforce geared towards meeting a demand that is simply no longer there.

Back in November 2022, Meta co-founder and CEO Mark Zuckerberg apologised for over-investing in talent over the preceding two years, saying “I got this wrong” while announcing that 11,000 jobs would be cut.

Mr Nadella’s comment, above, about the need for Microsoft to align “cost structure with revenue and where we see customer demand” seems to be in line with this narrative.

Markets have responded well to the job cuts. Meta’s stock has risen by around 20 per cent since the November announcement, while Microsoft’s share price increased by 14 per cent since 18th January.