Microsoft and Google lay off hundreds amid economic uncertainty
In a significant step reflecting the current trend of downsizing in the IT sector, Microsoft and Google have announced large layoffs inside their cloud operations. These layoffs are part of a larger attempt to consolidate operations and focus on critical growth areas despite prolonged economic uncertainties.
Microsoft’s Azure cloud division faces major reductions
According to Business Insider, Microsoft plans to fire off hundreds of people within its Azure cloud operation. The reduction will have an enormous effect on the Azure for Operators and Mission Engineering teams, resulting in up to 1,500 job losses. These groups are part of the Strategic Missions and Technologies organisation, which was formed in 2021 to lead activities in quantum computing and space exploration.
According to a Microsoft representative, “Organisational and personnel adjustments are a necessary and regular element of managing our business. We will continue to prioritise and invest in important development areas for the benefit of our customers and partners.”
This round of layoffs follows prior cuts in January when Microsoft laid off 1,900 people from its Activision Blizzard and Xbox businesses. To fuel growth in its Azure cloud services, the firm has made significant investments in artificial intelligence and used its strategic alliance with OpenAI, the originator of ChatGPT.
Google trims workforce in cloud unit
Similarly, Alphabet Inc.-owned Google is laying off at least 100 employees from several teams in its cloud segment. According to CNBC, positions in sales, operations and engineering, consultancy, and “go to market” strategy are among those impacted. This decision is part of Google’s ongoing efforts to align corporate operations with consumer needs and future potential.
According to a Google spokesperson, “We are constantly evolving our business to meet our customers’ priorities and the significant opportunities that lie ahead. We remain committed to investing in areas vital to our business to ensure long-term success.”
This announcement comes after prior layoffs at Google, which included an undefined number of job cutbacks across various teams in April and several hundred positions in January.
Industry-wide impact and outlook
The layoffs at Microsoft and Google follow a larger trend of employment reduction in the technology and media industries in 2024. In response to the adverse economic situation, companies such as Amazon and Salesforce have decreased their workforces in recent months.
Both Microsoft and Google have stated their commitment to investing in strategic areas critical to their long-term success. Despite revamping its mixed reality division, Microsoft will continue to market its HoloLens 2 augmented reality headset, while Google continues to focus on crucial business sectors to ensure long-term success.
(With inputs from Reuters)