Why Layoffs Were Made: ‘We Hired For A Different Economic Reality’

Microsoft, Google and Amazon all held onto a common theme when announcing their layoffs: hiring too many people over the past several years when demand jumped during the COVID-19 pandemic.

“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” said Microsoft CEO Satya Nadella. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”

Microsoft is expecting a modest 2 percent year-over-year growth for its second fiscal quarter 2023—a far slower growth rate than Microsoft has seen over the past several years. For example, for its first fiscal quarter 2023, Microsoft grew sales by 11 percent year over year.

Google and Alphabet CEO Sundar Pichai said the 12,000 layoffs are due to hiring too many people over the past two years.

“Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” said Pichai.

Amazon CEO Andy Jassy said during the company’s annual planning process for 2023, leaders reviewed workforce levels, investments and what Amazon customers are prioritizing.

“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” said Jassy. “I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”