Key Takeaways
- Layoffs are continuing to impact the tech industry as Google and Microsoft reportedly have both cut hundreds of jobs in recent days.
- Tech lost the most jobs of any sector in the first quarter of 2024, according to a Challenger, Gray & Christmas report, with Amazon joining Google and Microsoft in trimming its workforce.
- Google’s latest layoffs reportedly hit its Cloud unit, while Microsoft’s Azure and HoloLens 2 teams were affected.
The trend of tech layoffs is continuing into June as hundreds of jobs have reportedly been cut at Microsoft (MSFT) and Alphabet’s (GOOGL) Google in recent days.
Tech had the most job cuts of any sector in the first quarter, according to a Challenger, Gray & Christmas report, with Google and Microsoft conducting layoffs along with other giants like Amazon (AMZN), as companies focused on artificial intelligence (AI) initiatives and pulled back on other investments.
Google’s Cloud Teams Hit
Layoffs reportedly have hit Google’s Cloud division, which saw sizable growth in the tech giant’s most recent earnings report. Cloud revenue rose 28% year-over-year to $9.57 billion, while segment operating income soared 371% to $900 million.
At least 100 positions have been cut across several different Cloud teams over the last week, according to reports from Business Insider and CNBC. Earlier this year, Google axed hundreds of jobs across a number of different teams, and also conducted more cuts last month, along with relocating some roles to Mexico and India, CNBC reported.
Google did not immediately respond to a request for comment, but a spokesperson told CNBC the company always plans to “continue to evolve our business to meet our customers’ priorities and the significant opportunity ahead.”
Microsoft Makes Sizable Cuts Across HoloLens 2, Azure Teams
Microsoft is also cutting jobs this week, with an estimated 1,000 jobs affected across its cloud-based Azure teams, as well as those working on the company’s HoloLens 2 mixed reality headsets, according to recent reports from Business Insider, CNBC, and The Verge.
A spokesperson told CNBC that while it “announced a restructuring of the Microsoft’s Mixed Reality organization,” the company plans to continue selling and supporting the device.
Azure revenue has been a key driver for the company as its cloud business has continued to grow, and this week’s layoffs are reportedly centered around the part of the unit that houses Microsoft’s “moonshots” program, with teams working on projects including space-related efforts and quantum computing.
Microsoft did not respond to a request for comment, but a company spokesperson told The Verge that “organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.”
The monthly jobs report from the Bureau of Labor Statistics set to be released this Friday could provide more details about the state of the U.S. labor market for investors.
Microsoft shares were down 0.4% as of 11:15 a.m. ET Tuesday to $412.00, while Alphabet stock was little changed at $172.82.