Main image of article Microsoft Reportedly Initiates Layoffs

Microsoft has reportedly initiated layoffs.

“Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” read Microsoft’s statement to CNBC. “We will continue to invest in our business and hire in key growth areas in the year ahead.”

Although the company didn’t cite the number of layoffs or the divisions impacted, Axios reports that the cuts affected “a variety of levels, teams, and parts of the world,” and totaled “under 1,000 workers.”

Microsoft has spent 2022 curbing some of its job-hiring momentum. In May, for example, it announced a hiring slowdown for its Office and Windows divisions. In July, a Bloomberg report suggested the company would cut back on open jobs, even in “hot” arenas such as cybersecurity and its Azure cloud platform.

At the same time, however, CEO Satya Nadella has poured money into retention efforts. In an internal email that leaked earlier this year, Nadella said he would double the budget for merit-based salary increases, with the range for annual stock-based compensation also rising. “The most meaningful increases will be focused where the market demands and on early to mid-career levels,” he wrote. “We are also increasing Annual Stock ranges by at least 25 percent for all levels 67 and below.” 

Microsoft isn’t the only tech giant slowing its hiring or cutting workers—just as it’s not the only one trying to keep its most skilled technology professionals onboard. Apple, Meta, Salesforce, and Google have all very publicly slowed or frozen hiring. Amazon, meanwhile, has boosted its maximum base pay for corporate and technology employees from $160,000 to $350,000 (on top of handing out “record amounts” of stock).

Keeping costs constrained while paying enough to retain very smart (and generally well-paid) technologists is a difficult tightrope for any company to walk. With the tech unemployment rate still notably low, highly skilled workers have lots of opportunities out there, and they’ll jump to a role that offers more money, flexible scheduling, and other perks. For managers everywhere, retention isn’t just about the money—it’s also about listening to team members to figure out what they really want when it comes to projects, benefits, and perks.