Microsoft
Microsoft hits pause on some AI data centre projects, including $1b Ohio site
Microsoft has announced it is “slowing or pausing” certain data centre construction projects, including a $1 billion development in Ohio, amid signals that the surge in demand for artificial intelligence (AI) infrastructure may be levelling off.
The company confirmed it is halting early-phase work on rural sites it owns in Licking County, near Columbus, Ohio. Two of the three properties will now be retained for agricultural use, AP reports.
“In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history,” said Noelle Walsh, Microsoft’s president of cloud operations, in a LinkedIn post.
Walsh added, “Any significant new endeavour at this size and scale requires agility and refinement as we learn and grow with our customers. What this means is that we are slowing or pausing some early-stage projects.”
While the tech giant has not disclosed details of other affected sites beyond Ohio, it had already paused later phases of a major data centre development in Wisconsin last December.
Earlier this year, analysts at TD Cowen noted Microsoft had been scaling back some international expansion and cancelling data centre leases in the US. Industry watchers have linked these adjustments to shifts in Microsoft’s partnership with OpenAI, the maker of ChatGPT.
Microsoft fires employees protesting AI technology contracts with Israel
“OpenAI was moving in one direction” by focusing on more powerful AI systems requiring vast computing capacity, while “Microsoft may not have been moving that same direction,” said Craig Ellis, research director at B Riley Securities.
In January, Microsoft and OpenAI revised their agreement, which had made Microsoft the exclusive provider of OpenAI’s computing infrastructure. The updated deal allows OpenAI to develop its own capacity, primarily for training and research.
Despite the pause, Microsoft still intends to spend over $80 billion globally on AI infrastructure in this fiscal year, which ends in June. The company says it has already doubled its data centre footprint in the past three years.
“While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand,” said Walsh.
The decision disappointed some local officials in Licking County, which has also drawn investment from Google, Meta, and chipmaker Intel — although Intel has delayed its planned factory to 2030.
6 days ago
Microsoft fires employees protesting AI technology contracts with Israel
Microsoft has dismissed two employees who interrupted the company's 50th anniversary event to protest its provision of artificial intelligence technology to the Israeli military, according to a workers' advocacy group.
In a termination letter issued on Monday, Microsoft accused one of the employees of engaging in misconduct "intended to gain attention and create maximum disruption" at the highly anticipated event. The other employee had previously announced her resignation but was instructed to leave five days earlier than planned on Monday.
The protest began on Friday when Microsoft software engineer Ibtihal Aboussad approached the stage where an executive was discussing new product features and Microsoft's long-term AI vision. Aboussad shouted, "You claim that you care about using AI for good, but Microsoft sells AI weapons to the Israeli military. Fifty thousand people have died, and Microsoft powers this genocide in our region," forcing the executive, Mustafa Suleyman, to pause his talk during the livestreamed event from Microsoft's Redmond, Washington campus. The event was attended by co-founder Bill Gates and former CEO Steve Ballmer.
Microsoft said Suleyman attempted to calm the situation, thanking Aboussad for her protest and acknowledging her message. However, Aboussad continued shouting that Suleyman and "all of Microsoft" had blood on their hands. She also threw a keffiyeh scarf, a symbol of support for Palestinians, onto the stage before being escorted out.
A second protester, Vaniya Agrawal, interrupted the event later. Aboussad, who is based at Microsoft's Canadian headquarters in Toronto, was invited to a meeting on Monday with a human resources representative, during which she was informed of her immediate termination, according to the advocacy group No Azure for Apartheid, which has protested Microsoft's Azure cloud services being used by Israel.
Earlier this year, an Associated Press investigation revealed that AI models from Microsoft and OpenAI were used in an Israeli military program to select bombing targets during recent conflicts in Gaza and Lebanon. The report also highlighted a 2023 Israeli airstrike that mistakenly hit a vehicle carrying members of a Lebanese family, killing three young girls and their grandmother.
Microsoft's termination letter to Aboussad stated that she could have raised her concerns privately with a manager but instead made "hostile, unprovoked, and highly inappropriate accusations" against Suleyman and the company. The letter also mentioned that her actions were so disruptive that security had to escort her out.
Agrawal had already submitted her resignation, scheduled for April 11, but on Monday, a manager informed her that her resignation would be effective immediately.
This protest was the most public, but not the first, against Microsoft's work with Israel. In February, five Microsoft employees were removed from a meeting with CEO Satya Nadella for protesting the company’s contracts.
Microsoft issued a statement on Friday, saying, “We provide many avenues for all voices to be heard,” but emphasized that protests should not disrupt business. The company also reiterated its commitment to maintaining high standards in its business practices.
While Microsoft had not commented on additional actions following the protest, both Aboussad and Agrawal noted that they lost access to their work accounts shortly after the incident.
Last year, dozens of Google employees were fired after internal protests regarding a contract with the Israeli government. Employees at Google offices in New York and Sunnyvale, California, had protested the $1.2 billion Project Nimbus, a deal providing AI technology to Israel. The Google workers later filed a complaint with the National Labor Relations Board to try to regain their jobs.
8 days ago
Microsoft to shut down Skype in May
Microsoft has announced that Skype, the once-popular video-calling service with hundreds of millions of users, will be discontinued in May.
Skype revolutionized online communication by enabling free computer-to-computer voice and video calls worldwide. Although not the first platform of its kind, it played a key role in popularizing internet-based calling.
In a post on X, Skype advised users to transition to Microsoft Teams, where they can continue their conversations with existing contacts. Microsoft, however, declined to comment when approached by BBC News.
Launched in 2003, Skype was acquired by Microsoft in 2011 for $8.5 billion—the company's largest acquisition at the time. It was later integrated into Microsoft's ecosystem, including Xbox and Windows devices. Tech analyst Om Malik once described Skype as one of the "key applications of the modern web," particularly after a major global outage in 2010.
Following news of Skype’s impending shutdown, users shared memories of how the service impacted their lives. Many recalled using it to stay in touch with loved ones, long before the rise of smartphones and WhatsApp.
One user on X described the news as the loss of "a fragment of adolescence," while another recounted how Skype was crucial for maintaining a transatlantic relationship. Digital marketing professional Anna Simpson reminisced about video-calling her grandparents in France nearly two decades ago, saying, “Back then, it felt like magic.”
When Microsoft acquired Skype, the platform had been downloaded over a billion times and boasted a vast user base. At the time, then-CEO Steve Ballmer envisioned it as the future of real-time communication.
However, as messaging services like WhatsApp and Facebook Messenger surged in popularity, Skype began to lose ground. A 2017 redesign, which borrowed elements from Snapchat, was met with user backlash. Tech journalist Rachel Kaser criticized the update, saying it was "fixing something that was never broken."
By 2021, speculation grew that Skype’s days were numbered when Microsoft integrated Teams into Windows 11 by default, while Skype was left out for the first time in years. The COVID-19 pandemic further accelerated Teams’ growth as remote work and virtual meetings became the norm.
With Skype’s closure confirmed, Microsoft is now encouraging users to migrate to Teams, which offers similar features along with added capabilities like meeting hosting, calendar management, and community building.
Skype users can export their chats, contacts, and call history before the shutdown. Those with paid subscriptions will continue to access services until their next renewal period.
1 month ago
Microsoft reports 10% quarterly profit growth as it works to show AI investments paying off
Microsoft said Wednesday that its profit for the October-December quarter grew 10% as it works to capitalize on the huge amounts of money it has spent to advance its artificial intelligence technology.
But while its overall profits and revenue beat Wall Street expectations, it slightly missed projections for its closely-watched cloud computing business, a centerpiece of its AI efforts.
The company reported net income for the quarter of $24.1 billion, or $3.23 per share, beating Wall Street expectations of $3.11 per share. The Redmond, Washington-based software maker posted revenue of $69.6 billion in the quarter, up 12% from the previous year, also beating expectations.
Analysts polled by FactSet Research expected Microsoft to generate revenue of $68.87 billion in the last three months of the year.
Sales from Microsoft’s cloud-focused business segment that includes its flagship Azure computing platform grew 19% from the same time last year to $25.5 billion, which was less than the $25.83 billion forecast by FactSet analysts.
Microsoft’s productivity business segment, which includes its Office suite of email and other workplace products, grew 14% to $29.4 billion.
Its personal computing business, led by its Windows division, remained steady at $14.7 billion, with a drop in consumer device sales offset by growth in advertising revenue tied to the Bing search engine.
How DeepSeek stacks up against ChatGPT and Gemini
Microsoft shares dropped 5% in after-hours trading Wednesday but were still higher than Monday, when the tech giant was hit by a broader tech stock sale caused by a frenzy over the new ChatGPT competitor developed by Chinese tech startup DeepSeek.
Microsoft is a close partner of ChatGPT maker OpenAI and also sells its own AI chatbot services, branded as Copilot. Part of what drove the Wall Street panic this week was concern over the startup's claims that it was catching up to U.S. tech titans on a fraction of their budget.
Microsoft CEO Satya Nadella downplayed those concerns on an investor call Wednesday, saying “DeepSeek had some real innovations” and it is good to have efficiency gains and lower prices in AI development because it “means people can consume more and there’ll be more apps written.”
Microsoft also added DeepSeek's latest AI model to those available on its Azure computing platform Wednesday.
Building and operating AI systems is costly, and Microsoft has said it plans to spend $80 billion this year as it expands its global network of energy-hungry computing centers and supplies them with specialized chips to train and run AI models.
“We have more than doubled our overall data center capacity in the last three years and we have added more capacity last year than any other year in our history,” Nadella said.
2 months ago
What’s New in Microsoft Office 2024: Key Features, AI Integrations, and Installation Guide
Microsoft Office 2024 is here, continuing the legacy of its iconic productivity suite with significant upgrades and new tools. With enhanced features across Word, Excel, and PowerPoint, improved collaboration capabilities, and cutting-edge AI integrations, this latest version is designed to boost productivity for individuals and teams alike. In this article, we’ll cover everything you need to know about Microsoft Office 2024, including installation steps, key features, potential limitations, and our overall verdict on this highly anticipated update.
How to Install Microsoft Office 2024
Microsoft Office 2024 is not available for free, but Microsoft provides a legal way to try it through the Microsoft Office 2024 LTSC (Long-Term Servicing Channel) preview. This preview version allows users to explore Office 2024’s features temporarily before committing to a purchase or a Microsoft 365 subscription. While Microsoft 365 offers continuous updates, cloud storage, and collaboration tools, the LTSC preview is ideal for those who want to test the software without an immediate financial commitment.
Read more: How to Detect an AI-generated Image
Here’s how to install Microsoft Office 2024 LTSC preview
.
Step 1: Uninstall Previous Versions
Before installing Office 2024, you need to uninstall any older versions of Microsoft Office. Open Settings on Windows, navigate to Apps → Apps & Features and search for Microsoft Office. Then, select the installed version and click Uninstall. Follow the prompts to complete the process.
Step 2: Download the Office Deployment Tool
Next, you will need to download the Office Deployment Tool. Visit the Microsoft website, download the tool, and save it in a folder named Office 2024 on your desktop. Delete any existing XML files from the folder to avoid conflicts.
Step 3: Configure Installation
Create a configuration XML file for your installation. Visit the LTSC Preview Installation Page, copy the XML code, and paste it into Notepad. You can customise it according to your preferences and save the file as configuration.xml in your Office 2024 folder.
Read more: 10 Best eBook Reader Apps for Android, iOS in 2024
Step 4: Install Office 2024
Open Command Prompt, navigate to the Office 2024 folder, and run this command:
setup /configure configuration.xml.
The installation will begin automatically.
Step 5: Activate Office 2024
After installation, activate Office using the product key from the LTSC Preview page.
This LTSC preview is temporary, and you will need to switch to a paid version eventually, but it is an excellent way to experience Office 2024 firsthand.
Key Features of Microsoft Office 2024
.
AI-Powered Copilot Assistance
One of the most significant additions in Office 2024 is the AI-powered Copilot, integrated into applications like Word, Excel, and PowerPoint. Copilot helps automate repetitive tasks, drafts content, analyses data trends, and offers smart recommendations, making work more efficient and intuitive.
Read more: Best Free Personal Safety Android, iOS Apps for Women in 2024
New and Improved User Interface
Office 2024 comes with a modernised design that follows Fluent Design principles, offering a more intuitive and consistent experience across all apps. The interface is sleek, minimalistic, and optimised for Windows 11, with new custom themes, toolbars, and Dark Mode improvements that enhance usability across devices.
Dynamic Arrays and Charting in Excel
Excel 2024 introduces Dynamic Arrays, which allow you to reference variable-length datasets within charts. This feature automatically updates charts as data recalculates, providing a more dynamic and accurate visual representation of your data. Fourteen new Text and Array functions simplify data manipulation.
Enhanced Collaboration with Loop Integration
The new Microsoft Loop integration in Office 2024 boosts real-time collaboration. Loop components can be embedded across different Office apps, allowing live updates and seamless teamwork. Whether you are in Word or Excel, changes made by your team appear instantly, improving efficiency in collaborative environments.
Read more: How to Activate Earthquake Alerts on Android, iOS Phones
Insert Pictures from Mobile Devices
A handy new feature in Office 2024 allows you to insert pictures directly from your Android phone into Word, Excel, and PowerPoint documents. This streamlines the process of adding visuals to your files, saving time and effort.
Present with Cameo in PowerPoint
PowerPoint 2024 introduces Cameo, a feature that lets you integrate your live camera feed into slides. This enables presenters to engage their audience more personally, using effects and transitions on their video feed to match the presentation’s style.
Word Session Recovery
Session recovery has been improved in Word 2024, allowing users to recover unsaved documents when the app closes unexpectedly. This ensures that your progress is not lost, even if the application crashes before saving.
Read more: Best Video Editing Apps for Android, IOS in 2024
Advanced Accessibility Tools
Office 2024 places a stronger emphasis on accessibility. The Accessibility Ribbon provides enhanced tools across Word, Excel, PowerPoint, and Outlook to ensure your content is accessible to all users. Features like real-time feedback from the Accessibility Checker allow users to create inclusive documents effortlessly.
OpenDocument Format (ODF) 1.4 Support
Office 2024 includes support for OpenDocument Format (ODF) 1.4, which adds compatibility for more modern document features. It includes tables within shapes and new accessibility attributes.
Limitations of Microsoft Office 2024
.
No Feature Updates
Microsoft Office 2024 offers a one-time purchase model, meaning that after the initial release, users will only receive security updates and bug fixes. Unlike Microsoft 365, Office 2024 will not receive new features, potentially leaving users with outdated software over time.
Read more: Water Battery: What's Special About It
No Cloud Storage or Collaboration Tools
Office 2024 does not include OneDrive cloud storage or any advanced collaboration tools like Microsoft Teams. This lack of cloud services limits remote access, team collaboration, and file sharing, making it less suitable for modern, cloud-based workflows.
Higher Initial Cost
While Office 2024 eliminates subscription fees, it comes with a higher upfront cost. This can be expensive compared to spreading payments over time with Microsoft 365. Additionally, there is no option to upgrade to newer versions without purchasing another license.
Limited Cross-Platform Compatibility
Office 2024 is primarily designed for use on one device. Users will need to buy separate licenses for Windows and Mac, and the software lacks the flexibility of Microsoft 365, which supports multiple devices, including mobile platforms.
Read more: Best Text-to-Speech Software in 2024
Reduced Support Lifecycle
Office 2024 will be supported for five years, after which no further updates, including security patches, will be provided. This limits the software’s long-term viability compared to subscription-based services like Microsoft 365, which receives continuous updates.
Verdict
Microsoft Office 2024 is a powerful update packed with advanced features, such as AI-driven Copilot and expanded collaboration via Loop, making it a highly productive tool for users across platforms. Its revamped UI and improved cloud integration provide a seamless experience, especially for those working on multiple devices.
However, the higher upfront cost and lack of ongoing feature updates may deter some, especially with the more modern and feature-rich Microsoft 365 subscription available. For businesses or individuals seeking robust tools without a subscription, Office 2024 remains a solid, versatile option.
Read more: Best Free Bangladeshi Online Doctor Apps for Android, iOS in 2024
6 months ago
Microsoft unveils strategic AI vision for India; here are the details
Microsoft has announced a comprehensive strategy to spearhead the development of artificial intelligence (AI) in India, aiming to empower AI developers and secure its position as the country's most trusted AI partner.
During a keynote in Bengaluru, CEO Satya Nadella outlined the company's mission to democratize AI access, stating, "AI for everyone. We want to be India's most trusted partner for that," as reported by NDTV. This initiative underscores Microsoft's commitment to fostering inclusivity and accessibility in the AI domain.
Facebook, Instagram users will start seeing labels on AI-generated images
As part of its commitment, Microsoft plans to provide AI training opportunities to 2 million individuals in India by 2025. This initiative will particularly focus on individuals in tier 2 and tier 3 cities, as well as rural areas, aiming to promote equitable socio-economic development across the country. Nadella highlighted the importance of collaboration between India and the United States in establishing AI regulations and laws to guide this technological progression.
Reflecting on the evolution of chat-based AI technologies like GPT, Nadella celebrated the historical advancements in computing and expressed the goal of creating machines that can understand human users to facilitate natural conversations on a variety of subjects, including sports.
Microsoft adds AI button to keyboards to summon chatbots
Microsoft's strategy involves leveraging a neural engine for digitizing and processing data to analyze vast information sets and identify patterns. The company anticipates that AI will significantly contribute to economic growth, especially through initiatives like Microsoft Copilots. This new venture is set to be promoted through an extensive marketing campaign, aiming to solidify Microsoft's role in the AI landscape.
Moreover, Microsoft is investing in the development of AI infrastructure, including model training and inference capabilities. Nadella boasted about possessing some of the most advanced big models, such as variations of GPT, and detailed an ambitious plan for expanding the company's AI capabilities.
New York Times suing ChatGPT maker OpenAI, Microsoft for copyright infringement
1 year ago
Explainer: What may have caused OpenAI board to fire Sam Altman
In a surprising move, OpenAI, the artificial intelligence research lab, ousted its CEO, Sam Altman, raising eyebrows and leaving shareholders in the dark.
While concerns about the rapid advancement of AI technology may have played a role in Altman's termination, the handling of the situation has drawn criticism from various quarters, reports CNN.
The decision to remove Altman, credited with steering OpenAI from obscurity to a $90 billion valuation, was made abruptly, catching even major stakeholders like Microsoft off guard.
Human drama at OpenAI: Board reportedly ‘in discussion’ with Sam Altman to return as CEO
The CNN report suggests that Microsoft, OpenAI's most important shareholder, was unaware of Altman's dismissal until just before the public announcement, causing a significant drop in Microsoft's stock value.
OpenAI employees, including co-founder and former president Greg Brockman, were also blindsided, leading to Brockman's subsequent resignation. The sudden departure of key figures prompted rumors of Altman and former employees planning to launch a competing startup, posing a threat to OpenAI's years of hard work and achievements, said the report.
The situation worsened due to the peculiar structure of OpenAI's board. The company, a nonprofit, harbors a for-profit entity, OpenAI LP, established by Altman, Brockman, and Chief Scientist Ilya Sutskever. The for-profit arm's rapid innovation to achieve a $90 billion valuation clashed with the nonprofit's majority-controlled board, resulting in Altman's dismissal, it also said.
The tipping point appears to be Altman's announcement at a recent developer conference, signaling OpenAI's intention to provide tools for creating personalised versions of ChatGPT. This move, seen as too risky by the board, may have triggered Altman's removal.
ChatGPT-maker OpenAI fires CEO Sam Altman
Altman's warnings about the potential dangers of AI and the need for regulatory limits indicate a clash between innovation and safety within OpenAI. The board's concerns about Altman's pace of development, while perhaps justified, were mishandled, leading to a crisis that could have been avoided.
The aftermath sees OpenAI scrambling to reverse the decision, attempting to entice Altman back. The incident has strained relations with Microsoft, which now demands a seat on the board. OpenAI's future hangs in the balance, with possibilities ranging from Altman's return to a potential competition with a new startup, the report also said.
In the end, OpenAI finds itself in a precarious position, facing potential internal upheaval and external challenges, highlighting the importance of strategic decision-making in the rapidly evolving field of artificial intelligence.
Microsoft hires OpenAI founder Sam Altman to lead AI research team
1 year ago
Microsoft reports boost in profits, revenue, as it pushes AI
Microsoft on Tuesday reported a 9% increase in profit for the January-March quarter, as growth in cloud computing sales helped bolster its plans to expand its use of artificial intelligence.
The company reported quarterly profit of $18.3 billion, or $2.45 per share, beating Wall Street expectations for earnings of $2.24 a share.
The software maker posted revenue of $52.9 billion in the period, its third fiscal quarter, up 7% from the same period a year ago. Analysts polled by FactSet expected Microsoft to post revenue of $51.02 billion for the quarter.
The quarter marked an ambitious push by Microsoft to capitalize on its investments in artificial intelligence and close partnership with San Francisco-based startup OpenAI with the February release of a new AI chatbot feature on its search engine Bing.
Also Read: Is Bing too belligerent? Microsoft looks to tame AI chatbot
Microsoft is also integrating similar AI tools into the cloud computing and software products it sells to big businesses and organizations, though it's not immediately apparent to what extent the AI features are playing a role in overall sales.
Microsoft’s personal computing business, centered on its Windows software, was widely expected to continue a deterioration that began last year due to economic uncertainties and crimped demand. Quarterly sales from that segment dropped 9% to $13.3 billion, the company said Tuesday.
Also Read: Google hopes ‘Bard’ will outsmart ChatGPT, Microsoft in AI
Making up for that decline was a 16% increase in revenue from Microsoft's cloud-based business segment, to $22.1 billion for the quarter. Revenue also grew 11% to $17.5 billion from Microsoft's productivity software segment centered around its Office suite of workplace products such as email.
1 year ago
Google hopes ‘Bard’ will outsmart ChatGPT, Microsoft in AI
Google is girding for a battle of wits in the field of artificial intelligence with “Bard,” a conversational service apparently aimed at countering the popularity of the ChatGPT tool backed by Microsoft.
Bard initially will be available exclusively to a group of “trusted testers” before being widely released later this year, according to a Monday blog post from Google CEO Sundar Pichai.
Google’s chatbot is supposed to be able to explain complex subjects such as outer space discoveries in terms simple enough for a child to understand. It also claims the service will also perform other more mundane tasks, such as providing tips for planning a party, or lunch ideas based on what food is left in a refrigerator. Pichai didn’t say in his post whether Bard will be able to write prose in the vein of William Shakespeare, the playwright who apparently inspired the service’s name.
Read More: Google's AI Chatbot Bard: All You Need to Know
“Bard can be an outlet for creativity, and a launchpad for curiosity,” Pichai wrote
Google announced Bard’s existence less than two weeks after Microsoft disclosed it’s pouring billions of dollars into OpenAI, the San Francisco-based maker of ChatGPT and other tools that can write readable text and generate new images.
Microsoft’s decision to up the ante on a $1 billion investment that it previously made in OpenAI in 2019 intensified the pressure on Google to demonstrate that it will be able to keep pace in a field of technology that many analysts believe will be as transformational as personal computers, the internet and smartphones have been in various stages over the past 40 years.
Read More: ChatGPT maker releases tool to help teachers detect if AI wrote homework
In a report last week, CNBC said a team of Google engineers working on artificial intelligence technology “has been asked to prioritize working on a response to ChatGPT.” Bard had been a service being developed under a project called “Atlas,” as part of Google’s “code red” effort to counter the success of ChatGPT, which has attracted tens of millions of users since its general release late last year, while also raising concerns in schools about its ability to write entire essays for students.
Pichai has been emphasizing the importance of artificial intelligence for the past six years, with one of the most visible byproducts materializing in 2021 as part of a system called “Language Model for Dialogue Applications,” or LaMDA, which will be used to power Bard.
Google also plans to begin incorporating LaMDA and other artificial intelligence advancements into its dominant search engine to provide more helpful answers to the increasingly complicated questions being posed by its billion of users. Without providing a specific timeline, Pichai indicated the artificial intelligence tools will be deployed in Google’s search in the near future.
Read More: ChatGPT by Open AI: All you need to know
In another sign of Google’s deepening commitment to the field, Google announced last week that it is investing in and partnering with Anthropic, an AI startup led by some former leaders at OpenAI. Anthropic has also built its own AI chatbot named Claude and has a mission centered on AI safety.
2 years ago
Job cuts in tech sector spread, Microsoft lays off 10,000
Microsoft is cutting 10,000 workers, almost 5% of its workforce, joining other tech companies that have scaled back their pandemic-era expansions.
The company said in a regulatory filing Wednesday (January 18, 2023) that the layoffs were a response to “macroeconomic conditions and changing customer priorities.”
The Redmond, Washington-based software giant said it will also be making changes to its hardware portfolio and consolidating its leased office locations.
Microsoft is cutting far fewer jobs than it had added during the COVID-19 pandemic as it responded to a boom in demand for its workplace software and cloud computing services with so many people working and studying from home.
Read More: Recession-Proof Your Career With Tech Skills
“A big part of this is just overexuberance in hiring,” said Joshua White, a finance professor at Vanderbilt University.
Microsoft’s workforce expanded by about 36% in the two fiscal years following the emergence of the pandemic, growing from 163,000 workers at the end of June 2020, to 221,000 in June 2022.
The layoffs represent “less than 5 percent of our total employee base, with some notifications happening today,” CEO Satya Nadella said in an email to employees.
“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” Nadella said. He emphasized the importance of building a “new computer platform” using advances in artificial intelligence.
Read More: 11 Virtual Meeting Etiquette Rules for Professionals
He said customers that were accelerating their spending on digital technology during the pandemic are now trying to “optimize their digital spend to do more with less.”
“We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” Nadella wrote.
Other tech companies have also been trimming jobs amid concerns about an economic slowdown.
Amazon and business software maker Salesforce earlier this month announced major job cuts as they prune payrolls that rapidly expanded during the pandemic lockdown.
Read More: Malta Work Permit Visa for Bangladeshi Citizens
Amazon said that it will be cutting about 18,000 positions and began notifying affected employees Wednesday in the U.S., Canada and Costa Rica, with other regions to follow, according to emails from executives. The job cuts, which began in November, are the largest set of layoffs in the Seattle company’s history, although just a fraction of its 1.5 million global workforce.
Also Wednesday, the U.K.-based cybersecurity firm Sophos confirmed it had laid off 10% of its global workforce — 450 employees — on Tuesday. Sophos, known for threat intelligence and detection, was acquired in 2020 by the private equity firm Thoma Bravo for $3.9 billion.
Facebook parent Meta is laying off 11,000 people, about 13% of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce.
Nadella made no direct mention of the layoffs on Wednesday when he put in an appearance at the World Economic Forum’s annual meeting happening this week in Davos, Switzerland.
Read More: Career Counseling: 10 Reasons you need a Career Coach
When asked by the forum’s founder Klaus Schwab on what tech layoffs meant for the industry’s business model, Nadella said companies that boomed during the COVID-19 pandemic are now seeing “normalization” of that demand.
“Quite frankly, we in the tech industry will also have to get efficient, right?” Nadella said. “It’s not about everyone else doing more with less. We will have to do more with less. So we will have to show our own productivity gains with our own sort of technology.”
Microsoft declined to answer questions about where the layoffs and office closures would be concentrated. The company sent notice to Washington state employment officials Wednesday that it was cutting 878 workers at its offices in Redmond and the nearby cities of Bellevue and Issaquah.
As of June, it had 122,000 workers in the U.S. and 99,000 elsewhere.
Read More: UNV Program: How to become a UN Volunteer from Bangladesh
White, the Vanderbilt professor, said all industries are looking to cut costs ahead of a possible recession but tech companies could be particularly sensitive to the rapid rise in interest rates, a tool that has been used aggressively in recent months by the Federal Reserve in its fight against inflation.
“This hits tech companies a little harder than it does industrials or consumer staples because a huge portion of Microsoft’s value is on projects with cash flows that won’t pay off for several years," he said.
Among the projects that have been attracting attention recently is Microsoft’s investment in its San Francisco startup partner OpenAI, maker of the writing tool ChatGPT and other AI systems that can generate readable text, images and computer code.
Microsoft, which owns the Xbox game business, also faces regulatory uncertainty in the U.S. and Europe delaying its planned $68.7 billion takeover of video game company Activision Blizzard, which had about 9,800 employees as of a year ago.
Read More: Interview Anxiety: How to calm your nerves and avoid stress
2 years ago