Tag: Microsoft

Microsoft, Salesforce, Meta and Twitter make mass staff cuts

Big names in Big Tech are letting go of staff at what is said to be the most dramatic cull in tech sector history. Meta has laid off more than 11,000 employees thereby reducing its headcount by around 13 percent, while Microsoft announced at the end of October that it’s laying off around 1,000, with numbers still to be confirmed. Elon Musk led the charge, however, by laying off around half of its workforce when he took control of the social media platform on October 27. This, in a bid to run a financially healthier business by taking it private and enhancing his unilateral power as CEO.

Salesforce has joined the avalanche with an announcement of 2,500 redundancies in the US, with the jury still out on whether or not the mass layoffs will reach UK shores.

Meta, the social media giant, is battling falling revenues and rising competition despite reporting profits in excess of £23 billion. Chief Executive Mark Zuckerberg emailed employees on Wednesday morning informing them of the redundancies.

He said: “I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.” Zuckerberg said revenue growth experienced during the pandemic had not been sustained, ad performance was down, and ecommerce had declined, all in an environment of economic downturn.

He added: “[These factors] caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.” Despite drops in share prices and apprehension around Zuckerburg’s Metaverse development, he has said that investment in Real Labs will continue.

Why? the industry is asking. Since the pandemic, the tech industry has seen an explosion of use of and investment in tech, probably since Facebook’s arrival 18 years ago. The result of rising inflation and reduced revenue seem to be the main reasons for the slew of mass redundancies, even in the face of reporting massive revenue over the last year.

Ken Brotherston, TALiNT Partners CEO said: “First of all, it’s only the most dramatic cull in tech history if you’re under 40. The dot com reverse was quicker and deeper in percentage terms but, of course, that isn’t any comfort if you are one of the people affected. What might offer some succour however is that we still have a pretty robust employment market with a lot of the skills previously valued by these big tech firms still in high demand from lots of other employers.”

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Nearly all major tech firms have slowed headcount growth

Microsoft Corp. has announced layoffs across multiple divisions, according to media reports, joining many other tech firms that have cut staff in the unsettled economy.

Microsoft declined to say how many jobs had been cut, but a source told Axios that the layoffs numbered under 1,000.

In a statement to Axios, the tech giant 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,”.

The move is yet another example of large tech companies cutting jobs after earlier moving to slow or freeze hiring as the broader economy cools, Axios reported. Nearly all the major tech firms have slowed headcount growth, with many freezing all but essential hires. A number of companies have already moved to cut jobs, including Snap and Flipboard.

Microsoft has not said how many people had been laid off, nor which departments were impacted. However, The Washington Post reported layoffs affected the wargame simulation division and the Xbox gaming division.

Microsoft had 221,000 employees as of June 30, an increase of 40,000 people or 22% from the same point the prior year, GeekWire reported. It was the largest annual increase in employment in Microsoft’s history, based on data tracked by GeekWire.

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Hiring slowdown could impact future results

Microsoft Corp. has reported that LinkedIn revenue rose 17% to $3.66 billion in the company’s fiscal first quarter ended Sept. 30. The increase as measured in constant currency was 21%. The increase was driven by LinkedIn’s talent solutions recruiting business.

However, Microsoft warned of a hiring slowdown impacting LinkedIn when announcing upcoming guidance.

Amy Hood, Microsoft CFO commented: “For LinkedIn, we expect continued strong engagement on the platform, although results will be impacted by a slowdown in advertising spend and hiring resulting in mid-to- high-single-digits revenue growth or low to mid-teens growth in constant currency.”

Still, the company reported high levels of engagement on LinkedIn.

Satya Nadella, Microsoft CEO said: “We once again saw record engagement among our more than 875 million members, with international growth increasing at nearly two times the pace as in the Unites States, in the first-quarter conference call with analysts.”

Nadella also noted there are more than 150 million subscriptions to newsletters on LinkedIn, a four-fold increase year over year.

In addition, Microsoft’s acquisition of EduBrite will allow workers to earn professional certificates directly on LinkedIn, the company announced.

Overall, total revenue at Microsoft was $50.1 billion in its fiscal first quarter, up 11% year over year — an increase of 16% in constant currency.

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Is a collaborative approach with employees the answer to labour issues?

With public unionization movements taking place at various Big Tech companies, Microsoft wasn’t to be left out. The tech giant announced last week that it planned to follow an “open and constructive approach” to union organization from its employees.

In their announcement on June 2, 2002, they emphasized that while it wasn’t a requirement for employees to form a union to engage with company leadership, employees have the legal right to create a union.

The company outlined four principles to guide their open attitude to unionization. Among these were that they were “committed to creative and collaborative approaches with unions when employees wish to exercise their rights and Microsoft is presented with a specific unionization proposal.”

Microsoft is currently acquiring Activision Blizzard in an all-cash transaction valued at $68.7 billion. This announcement comes on the back of a vote taken at the end of May by an Activision Blizzard subsidiary to form a union.

Right now, the tech industry seems to be lit up by unionization efforts, with Amazon in a heated battle against unionization at some of its facilities, including in New York and Alabama.

In this post-pandemic world, worker power appears to be on the rise in companies across the US, with unions seeing increased activity in numerous sectors. The retail industry is just one example, with Starbucks and REI, where a number of strikes broke out late in 2021.

In what is known as #striketober, workers made demands for improved benefits, including better pay, flexible hours and more time off.

When it comes to unhappy staff, prevention is better than cure. One solution to staving off strike action would be listening to and acting on employee feedback. A Perceptyx survey released in April revealed that employers who did this were 11 times for likely to retain staff than those who didn’t.

Interestingly, fewer employers in the healthcare and retail industries were “listening to employees” than in other industries. These industries have also faced strike and unionization activities, high staff turnover and labour shortages.

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