Microsoft Chairman and CEO Satya Nadella speaks during a news conference on the company’s campus in Redmond, Washington, on May 20, 2024.
Jason Redmond | AFP | Getty Images
Microsoft The company confirmed to CNBC on Wednesday that it would lay off a small number of employees in various divisions based on performance.
“At Microsoft, we are focused on high-performing talent,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “We are always committed to helping people learn and grow. When people behave poorly, we take appropriate action.”
business insider The plans were reported late Tuesday.
The layoffs will affect less than 1% of employees, said a person familiar with the matter who asked not to be identified discussing private information.
As of the end of June, Microsoft had 228,000 employees. Although the company’s net profit margin of nearly 38% is near its highest level since the early 2000s, Microsoft’s stock price underperformed its peers last year, rising 12%, while the Nasdaq rose 29%.
Microsoft’s latest layoffs are smaller than recent layoff efforts.
In early 2023, the company laid off 10,000 employees and consolidated leases. In January 2024, three months after completing its $75.4 billion acquisition of Activision Blizzard, Microsoft cut 1,900 jobs in its gaming division to reduce overlap.
As 2025 begins, Microsoft’s relationship with artificial intelligence startup OpenAI, to which it has provided more than $13 billion in support, becomes even more tenuous. Last year, the partnership helped Microsoft’s market value exceed $3 trillion.
This summer, Microsoft added OpenAI to its list of competitors. Microsoft CEO Satya Nadella used the term “collaborative tension” when discussing his relationship with investors Brad Gerstner and Bill Gurley word. podcast Released last month.
Meanwhile, the Microsoft 365 Copilot assistant, which leverages OpenAI technology, has yet to become popular in business. Analysts at UBS Group AG said in a report last month that after attending Microsoft’s Ignite conference, they were left with the impression that Copilot’s rollout was “a bit slow/uninteresting.”
Microsoft is still touting its growth opportunities. Finance chief Amy Hood said in October that Microsoft’s Azure cloud revenue growth will accelerate in the first half of this year due to stronger artificial intelligence infrastructure capabilities.
watch: Microsoft plans to spend $80 billion this year to build artificial intelligence
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