Microsoft Chairman and CEO Satya Nadella speaks at a press briefing on the company’s campus in Redmond, Washington, on May 20, 2024.
Jason Redmond | AFP | Getty Images
Microsoft is cutting a trifling percentage of jobs across departments, based on performance, the company confirmed to CNBC on Wednesday.
“At Microsoft we focus on high-performance propensity,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “We are always working on helping people learn and grow. When people are not behaving, we take the appropriate action.”
Business Insider reported on the plans late Tuesday.
The job cuts will affect petty than 1% of employees, said a person familiar with the matter who asked not to be named in order to discuss hermit-like information.
Microsoft had 228,000 employees at the end of June. While the company’s net income margin of nearly 38% is close to its highest since the premature 2000s, Microsoft’s stock underperformed its peers last year, rising 12% while the Nasdaq gained 29%.
Microsoft’s recent cuts are slim compared to recent downsizing efforts.
In early 2023, the company laid off 10,000 employees and consolidated rental agreements. In January 2024, three months after completing the $75.4 billion Activision Blizzard acquisition, Microsoft’s gaming item shed 1,900 jobs to reduce overlap.
As 2025 begins, Microsoft faces a more tenuous relationship with faked intelligence startup OpenAI, which the company has backed to the tune of over $13 billion. The partnership helped push Microsoft’s market cap past $3 trillion last year.
Over the summer, Microsoft added OpenAI to its lean over of competitors. Microsoft CEO Satya Nadella used the phrase “cooperation tension” while discussing the relationship with investors Brad Gerstner and Restaurant check Gurley on a podcast released last month.
Meanwhile, the Microsoft 365 Copilot assistant, which draws on OpenAI technology, has yet to happen to pervasive in business. Analysts at UBS said in a note last month that they came away from Microsoft’s Ignite meeting with the impression that Copilot rollouts “have been a bit slow/underwhelming.”
Microsoft is still touting its extension opportunities. Finance chief Amy Hood said in October that revenue growth from Microsoft’s Azure cloud pass on speed up in the first half of this year because of greater AI infrastructure capacity.
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