10,000 Microsoft employees must go – the layoff snowball is growing in the tech industry

The news in the tech business is not great. Expectations of a difficult economy for tech companies have led to a surge in layoffs. Most recently Microsoft announced trimming its workforce by 5% or 10,000 employees - despite having $15.6 billion cash on hand.

As late as October, the company announce reductions of only 1,000 workers. The company said that customers accelerated spending during the pandemic, however, they are now putting the brakes on their spending for digital infrastructure.

Nearly every company requiring workstation performance relies on Microsoft for critical infrastructure. Intel is also included is this group with its announcement to cut jobs and other spending to save $3 billion. The chip maker is reacting to a slowdown in personal computer sales, however, it has $4.5 billion cash on hand and just paid out $1.5 billion in dividends. 

HP, one of the leaders in workstation hardware will eliminate more than 6,000 jobs, albeit over 3 years despite being flush with cash. During its fiscal 2022 year, it spent $4.3 billion on stock buy-backs, $1.0 billion on dividends, and ended the year with $3.2 billion in cash.

The go-to company for infrastructure, Cisco, has announced a large restructuring plan that will incur $600 million in charges. While there will be terminations, the company claims that it is not about reducing the overall workforce, restructuring.

The bright spots in workstation tech include NVIDIA and AMD. NVIDIA’s CEO has reportedly stated that no layoffs are planned. AMD has not mentioned layoffs either. Both are positioned to weather any additional economic slowdown and are well positioned for a rebound in PC, workstation, and computing demand. 

(This article has been updated with additional financial details for Microsoft, Intel, and HP.)

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