Microsoft is cutting 10,000 workers, almost 5% of its workforce, in response to “macroeconomic conditions and changing customer priorities”, CEO Satya Nadella confirmed in an internal mail sent to employees on Wednesday. The company said in a regulatory filing earlier on Wednesday that it had just notified employees of the layoffs, some of which begin immediately. In his letter to the employees, Satya Nadella said he is confident that Microsoft will emerge from this situation, but “it requires us to take actions grounded in three priorities”.

The company said it will also be making changes to its hardware portfolio and consolidating its leased office locations — all of which are designed to save about $1.2 billion.

Here is what Satya Nadella wrote to Microsoft employees as 10,000 jobs are now gone

These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts,” the email read.

“We will continue to invest in strategic areas for our future, meaning we are allocating both our capital and taken to areas of secular growth and long term competitiveness for the company while divesting in other areas,” Nadella wrote.

Microsoft will be taking a $1.2 billion charge in Q2 related to severance costs, changes to the hardware portfolio etc.

“We will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3,” Satya Nadella wrote confirming the job cut.

The third priority will be treating these people who will be losing jobs with respect and transparency. “These decisions are difficult, but necessary. They are especially difficult because they impact people and people’s lives – our colleagues and friends. We are committed to ensuring all those whose roles are eliminated have our full support during these transitions. US-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination, regardless of whether such notice is legally required. Benefits for employees outside the US will align with the employment laws in each country,” Nadella’s mail said.

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