Microsoft Rumored to Abolish Suzhou Division in China, Future Adjustments Inevitable

Reports recently surfaced alleging that Microsoft would reduce its Suzhou division in China, implementing large-scale layoffs with compensation of more than 12 months of salary, stock lift and a year of social security benefits. However, according to national media outlet China Star Market, several independent sources confirmed that the news was not true.

In January, Microsoft announced that due to poor economic conditions and changing customer needs, it would lay off 10,000 people worldwide by the end of March, about 5% of its total number of employees. employees.

An employee of the Suzhou division said that China would be affected by Microsoft’s large-scale layoff plan, but Microsoft Suzhou has nearly 3,000 employees in its R&D center alone, and it is impossible for the company to remove the entire division. Another employee said Microsoft Suzhou’s second phase of construction was completed in May last year and employees will move in in June this year, while the building’s third phase has already begun construction.

SEE ALSO: Microsoft to cut 10,000 jobs, affecting China division

Nevertheless, future tweaks and optimizations are beyond doubt. Another employee said that some new graduates did not get full employment and resources in China were withdrawn.

Earlier, Microsoft said the global layoffs and related changes will result in a loss of $1.2 billion in revenue for the company in the fourth quarter of 2022. The layoffs are in response to “changes in the macroeconomic situation and priorities client”. In addition, the company will adjust a series of hardware systems and integrate the leased office space.

With this wave of layoffs, human resources and business jobs have been the hardest hit areas, and a small number of R&D technical employees have also been affected, mainly those who were performing poorly. Microsoft’s social metaverse AltSpaceVR and HoloLens chief display teams have been hit hard, and several project teams have been disbanded.

Since the second half of last year, US tech giants Google, Amazon and Meta have successively released large-scale layoff plans.

According to the latest financial report, Microsoft’s performance has not been as good as expected. In the second quarter of fiscal 2023 ended December 31, 2022, the company’s core personal computing business, including Windows, Xbox, Surface and search advertising, reported revenue of $14. $24 billion, down 19% year over year. As customers reduce cloud spending, growth in Azure, the key cloud business driving Microsoft’s performance growth, has also slowed to 31%. Microsoft CEO Satya Nadella predicted cloud business could slow another four to five percentage points over the next six months.

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