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Microsoft Layoffs Ahead Of Q2 Earnings: 5 Things To Know

Wade Tyler Millward

‘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,’ Microsoft CEO Satya Nadella says.

Microsoft is feeling pain from growth deceleration coming off high demand for remote working and digital transformation tools during the pandemic – but whether the pain is from economic factors outside Microsoft’s control or a maturation of its products is what partners and investors will watch during the company’s second fiscal quarter earnings call scheduled for next Tuesday.

The Redmond, Wash.-based tech giant confirmed the upcoming layoff of about 10,000 employees, less than 5 percent of its 221,000 worldwide employee headcount.

CEO Satya Nadella has placed the blame on hiring to keep up with demand during the pandemic that has now diminished.

“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,” Nadella said. “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.”

[RELATED: Satya Nadella Confirms 10,000 Microsoft Layoffs]

Microsoft Announces Layoffs, $1.2 Billion Hit

Nadella also promised to keep investing in innovation and that he expects “Microsoft will emerge from this stronger and more competitive.”

CRN has reached out to Microsoft for comment about the effect of the layoffs on its partner organization.

Microsoft has not revealed what roles are being cut and whether the layoff touches key engineering jobs or partner-facing employees.

Microsoft will report its performance for the fiscal quarter ended Dec. 31.

Until then, CRN is breaking down what you need to know about the layoffs and Microsoft’s performance heading into its next earnings call.

We get into:

* What you need to know about the layoffs

* How Nadella hinted at the upcoming changes

* How Microsoft is investing in innovation

* The investors who are still upbeat

* The investment firms who predicted bad news

Here’s what you need to know.

 
Wade Tyler Millward

Wade Tyler Millward is an associate editor covering cloud computing and the channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at wmillward@thechannelcompany.com.

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