Microsoft to cut 10,000 jobs to rein in costs

Microsoft chief executive Satya Nadella said in a memo to staff that more people were now choosing to "exercise caution" amid economic uncertainty.

The redundancies will affect up to 5% of its workforce and cost the business $1.2bn (£972m) in severance and reorganisation costs.

“We’re living through times of significant change,” he said.

Read more: Wages grow at fastest rate in 20 years, but fail to keep up with inflation

“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.

“We’re also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”

Tech firms enjoyed a boom during the pandemic because of remote working but demand has slowed of late in the face of rising inflation and a slowdown in growth.

Nadella said many parts of the world were in recession or anticipating one, while "at the same time, the next major wave of computing is being born, with advances in AI".

Reports suggest that Microsoft is considering a multi-billion-dollar investment in artificial intelligence company OpenAI.

Read more: Inflation likely to continue to outstrip pay in 2023

According to the Financial Times, the U.S software giant is mulling a $10 billion investment in research outfit, which launched ChatGPT, an impressive chatbot which has one of the largest and most powerful language processing AI models to date, according to Science Focus.

It is capable of generating human-like text and has a wide range of applications, including language translation and modelling, and generating text for applications such as chatbots.

Microsoft is the latest tech giants to reveal massive lay-offs in recent weeks, notable examples include Meta, Amazon and Twitter.

At the start of this year, Amazon announced that it planned to cut more than 18,000 jobs because of "the uncertain economy" and rapid hiring during the pandemic.

The bulk of the cuts will likely be from its brick-and-mortar stores and its HR department, according to its Chief Executive Andy Jassy.