This hasn’t been a great year for a lot of companies, including in the tech industry. In the 47 years Microsoft has been around, it’s seen plenty of economic advances, with its stock growing 200% in the past five years, thanks to brands like Xbox, Windows, Azure and Office. But, just this year, its stock has fallen a whopping 29%. What gives? Like many industries, tech has been hit hard by the effects of inflation and falling consumer demand. Fewer PC sales have been a major factor in this drop.
On Monday, a Microsoft spokesperson confirmed that the company has had to make a lot of layoffs. The company expects revenue to continue to lag with fewer sales of Windows licenses for PCs. The layoffs are affecting the entire company, even the Xbox gaming division, which was thought to be relatively safe from job cuts. The cuts are also happening all over the world. It’s not clear exactly how many jobs have been cut, but one source said it’s less than 1,000.
“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," Microsoft said in a statement.
“While it’s reasonable for a company the size of Microsoft to occasionally review and reduce headcount, the timing of these cuts makes their justification feel insincere," said Brad Sams, general manager at Stardock Software.
“The layoffs at Xbox are surprising, considering Microsoft’s push behind gaming, but it does rhyme with the current economic momentum," said Joost van Dreunen, a lecturer on gaming at New York University’s Stern School of Business.