Microsoft, world's most valuable company, is laying off employees in thousands due to…, reason will shock you
Microsoft is firing around 6,000 workers which is around 3% of its total staff. According to media reports, the reason behind layoffs is because the company wants to reduce expenses. However at the same time tech giants are spending a lot on artificial intelligence (AI).
This is Microsoft's highest job cuts after last year, when it laid off 10,000 workers. Even in January, some staff were terminated due to low performance. According to a report by CNBC the current performance is not related to the performance.
Many tech companies like Google and Microsoft are investing into AI and cutting jobs at the same time. A Microsoft spokesperson said, 'We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.''
Microsoft had 228,000 employees till June last year. Google has also fired many employees earlier to cut costs.
Microsoft's cloud platform Azure's performance was good but spent a lot on developing its AI systems. It also impacted on its profits. In Q4, Microsoft Cloud profit margins fell to 69% which is lesser than last year's 72%.
The firm is also investing $80 billion mainly to build additional data centres for AI tools and services.
'We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures,' Luria told Reuters.
(With inputs from Reuters)
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