The company will take a $1.2 billion charge in the second quarter related to the move, it said in a blog post Wednesday. The layoffs come as the software giant said it’s seeing customers exercise caution, with some parts of the world in recession. Microsoft is scheduled to report fiscal second-quarter earnings on Jan. 24.
Chief Executive Officer Satya Nadella said the company is seeing “customers optimize their digital spend to do more with less.”
While peers such as Amazon.com Inc., Meta Platforms Inc. and Salesforce Inc. have announced cuts by the thousands in the past few months, Microsoft had so far taken smaller steps to try to reckon with the shaky global economic outlook and the potential for a protracted slowdown in demand for software and services. The company, based in Redmond, Washington, has eliminated open positions and paused hiring, even in priority businesses like security software and cloud computing. It most recently shrank its workforce of 221,000 by less than 1% each time in October and July.