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Big tech companies have been implementing new changes to tackle the recent economic struggles. Tech giants, such as Microsoft and Google, are among the many firms to have implemented hiring freezes and job cuts as the economic downturn plunges businesses into uncertainty.
Firms such as Google, Microsoft, Facebook and more have made great profits during the COVID-19 pandemic.
In 2021, it was reported by Refinitiv that Microsoft’s productivity segment and personal computing area sales were expected to have a midpoint gain of $12.50 billion.
In fact, Microsoft's Chief Financial Officer, Amy Hood, said: “This was really driven by continued customer demand, with stronger-than-expected consumption as customers have increased their focus on digital transformation.”
U-turn with changes
However, it was reported that Microsoft is continuing to cut staff from its workforce.
1,000 Microsoft employees have lost their jobs in the recent wave of job layoffs.
These layoffs consist of employees across the organisation at all levels, teams and geographic locations.
It’s cited as the main driving factor for the layoffs was the slowing revenue amid weaker sales across Windows licenses for PC.
Marco Casassa Mont, Principal Cyber Security Consultant and Senior Manager at BMT, expressed: “If confirmed, this is a worrying trend.”
A spokesperson for Microsoft said the firm was, “like all companies", evaluating its business priorities on a regular basis and making structural adjustments accordingly.
Richard Brock is a former employee of Microsoft that was recently laid off and he stated: “Unfortunately, my time while on contract with Microsoft is coming to an early end on 2nd November, due to being one of many impacted by further cuts within the business.”
Not the first for Microsoft
This isn’t the first time Microsoft has implemented such measures towards employees.
The same case occurred just last July when the leading company giant made 1,000 staff redundant as part of its annual summer clean-up for financial reasons.
Also, these employee layoffs were said to impact less than one per cent of the big tech company’s global employee workforce.
A Microsoft spokesperson said at the time: "Today we had a small number of role eliminations. Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly."
Although many people believed that the Q4 of Microsoft’s fiscal 2022 was going to be filled with positive change and new working models, the case is very different with the recent layoffs of 1,000 employees.
Hiring freezes have been in the spotlight in recent weeks with several employers, including the likes of Google and Meta, reportedly putting the brakes on recruitment activity temporarily.
In early August, Yahoo Finance reported that Facebook’s parent company, Meta, plans to slash hiring proposals for engineers by at least 30%, according to Reuters. Additionally, according to an email viewed by Bloomberg, Google’s CEO Sundar Pichai, explained that the company would be slowing hiring for the rest of the year.
Should my business implement a hiring freeze?
With some big tech giants, including Google and Meta, reportedly imposing hiring freezes, some in the business world might be wondering if this is a sign of things to come, and whether more companies will follow suit.
"It all depends on the type of business,” Calderwood said. “In the current economic climate, some will suffer with customers spending less. I would expect some businesses, such as non-essential retail, to really feel the pinch and therefore not hire during this time. Others might see an uplift in work though, and actively need to recruit.”
What next?
Big Tech companies, similar to over companies can struggle, have decreased in revenue and so on.
On the other hand, it’s fundamental to take charge and implement an action plan that works for both the company’s benefit and employees, because it shouldn’t a one-sided case where there are layoffs.
