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Microsoft Layoffs Hit Ahead Of Q1 Earnings

Wade Tyler Millward

‘Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,’ Microsoft says. The cuts reportedly hit Xbox, Studio Alpha, Edge and other divisions.

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Microsoft has laid off less than 1,000 employees in various departments and worldwide just days before the first quarterly earnings report of its 2023 fiscal year, according to multiple media reports.

The Redmond, Wash.-based tech giant cut jobs in its Xbox gaming division, the “mission expansion” cloud government division, the “strategic missions and technology” team and Studio Alpha, a war-gaming simulation division, according to Business Insider.

The cuts also hit the company’s Edge team, the experiences and devices division and the legal department, according to The Verge.

[RELATED: Microsoft Confirms Layoffs Ahead Of Earnings]

Did Microsoft Make Layoffs?

When asked about reports of layoffs, a Microsoft spokesperson said, “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead.”

At least one Microsoft gaming employee confirmed her layoff on Twitter.

Another Microsoft employee who worked as a business program manager for Azure Cloud said on LinkedIn that she was affected by the recent layoffs.

The layoffs are due in part to weaker Windows licenses sales for PCs, according to CNBC.

The company has more than 200,000 employees worldwide, according to Microsoft.

Microsoft’s next quarterly earnings report is set for Oct. 25. This will cover the first quarter of Microsoft’s 2023 fiscal year, which started July 1.

In July, the vendor let a “small number of employees” go Tuesday due to a “strategic alignment,” but that the tech giant still planned to “grow headcount in the year ahead.”

Microsoft joins other technology vendors in letting workers go amid growing concerns about inflation in the U.S. and a potential recession.

Salesforce, Oracle, Twilio and Avaya have cut workers recently. And Intel may have plans for layoffs as the PC market slumps.

The reports come amid global economic uncertainty that has the channel preparing for a possible recession. Recently, Douglas Holtz-Eakin, former director of the U.S. Congressional Budget Office, told a crowd at CRN parent The Channel Company’s XChange Best of Breed 2022 conference that he expects a modest recession to hit during the middle of 2023 due to the Federal Reserve increasing rates, continuing inflation and uncertainty ahead with China as well as Russia’s war in Ukraine.

Some technology leaders have remained optimistic that IT will remain resilient in a recession. Also speaking this week at Best of Breed, IBM CEO Arvind Krishna said that technology spending generally is growing 3 percent to 4 percent faster than GDP over the past five years.

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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