Microsoft confirms cutting about 1,000 of its workforce as layoffs and hiring freezes hit the tech sector

After a great year for tech, the industry now faces a new crisis as layoffs and hiring freezes hit the sector. As of the middle of October, more than 44,000 US tech workers have already lost their jobs, with more almost certainly on the way.

No company is spared from the global economic downturn as countries and Europe face recession. Microsoft is also not immune from the headwinds facing tech companies. Just like other tech companies, Microsoft had to make hard decisions and let go of some of its employees.

Microsoft is the latest technology company to cut jobs. The company is reportedly reducing its headcount by almost 1,000 as part of the layoffs announced Monday, according to a report from Axis, citing an unnamed person familiar with the matter.

The Redmond, Washington-based company confirmed on Monday that it has let go of some workers as part of its effort to cut costs amid slowing revenue growth and weaker sales of its Windows licenses for PCs.

Monday’s announcement comes just three months after Microsoft cut less than 1% of its total workforce from different groups. The tech giant employed 181,000 people as of June 2021, the company said.

In a statement, a Microsoft spokesperson told CNBC: “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.”

The global economic downturn that started in the second quarter of this year is beginning to have a major impact on tech companies. As we reported early this month, over 32,000 tech workers lost their jobs in July. That number has since climbed to about 44,000, according to the latest tally from CrunchBase, a platform for finding business information about private and public companies.

In recent months, tech companies, crypto exchanges, financial firms, and banks have reduced their headcount and slowed hiring as global economic growth weakens due to looming recession, inflation, higher interest rates, the energy crisis in Europe, and the ongoing war in Ukraine.

Tech companies, especially social media platforms, are under pressure as companies cut back on ad budgets in response to rising costs and weakening consumer spending. Two months ago, Snap said it would miss revenue and profit targets for the second quarter and would have to slow hiring and lower spending.