MICROSOFT and Amazon, the world's two largest companies, have begun layoffs affecting a total of 28,000 jobs in the post-pandemic period that has shaken the technology sector.

The software giant has begun sending notices to around 10,000 workers who will lose their jobs this quarter, while its Seattle neighbor and cloud technology competitor, Amazon, has started sending emails to people in the US, Canada and Costa Rica who are among the 18,000 whose jobs will be eliminated.

“This was necessary”

Both companies said the painful measures were necessary to make up for slowing sales and a possible recession that has made customers more cautious. The technology industry profited during the pandemic from increased demand for computers, phones, software and goods ordered online, which led to a frantic pace of hiring. 

Salesforce Inc. announced earlier this month that it would lay off about 10 percent of its workforce after acknowledging that its workforce had nearly tripled over the past four years. Facebook parent company Meta announced widespread job cuts last autumn, and Twitter reduced roughly half of its workforce.

Speaking before the cuts were announced, chief executive Satya Nadella pointed out that the technology industry is going through a period of slowing growth and will have to adapt.

“During the pandemic there was a sharp acceleration. I think today we will go through a phase in which there is a certain amount of normalization of demand,” Nadella said in an interview at the World Economic Forum in Davos, Switzerland. 

“We will have to do more with less – we will have to demonstrate our own productivity gains with our own technology.”

“Some of the hardest choices in our history”

Microsoft said it still plans to hire people in strategic, competitive areas such as artificial intelligence. The cuts also spread to Microsoft's video game division, where some people at Bethesda Game Studios, the maker of the upcoming Starfield, as well as at 343 Industries, the company behind the 2021 game Halo Infinite, were affected. Microsoft is eliminating 878 jobs in Washington, according to a state employment filing, Bloomberg reports.

“These are some of the hardest choices we have made throughout our 47-year history in order to remain a consistent company in this industry that is unforgiving toward anyone who does not adapt to platform changes,” Nadella said.

Meanwhile, Amazon's chief retail officer Doug Herrington said the retail giant's cuts are part of an effort to reduce costs “so they can continue investing in the broad selection, low prices and fast delivery that their customers love”. He said the company will continue to invest significantly in growth areas including groceries, Amazon's business-to-business sales program, third-party seller services and healthcare.

The cuts began last year and initially Amazon's devices and services group, which makes the digital assistant Alexa and Echo smart speakers, was hit the hardest. The latest round will mostly affect the retail and human resources sectors.

Source: index.hr