Microsoft is set to cut 10,000 jobs due to slowed spending as consumers exercise more caution following spikes in spending during the pandemic.

It’s thought that this round of layoffs – which will affect almost 5% of Microsoft’s workforce – will cost the company up to £972 million in severance and re-organisation costs.

Microsoft’s chief executive Satya Nadella broke the news to staff in a memo, saying that many parts of the world were in – or anticipating – a recession while technology is on the cusp of a new age through advancements in AI. The latter statement arguably serving as justification for the company – according to a report by The Times – considering a multi-billion dollar investment in OpenAI, the maker of ChatGPT.

This is the latest in a string of high-profile job culls from some of tech’s biggest names in recent months, with both Amazon and Meta announcing cuts – 18,000 and 11,000, respectively –  in the last few months.

Much like Meta and Amazon, Microsoft enjoyed substantial business growth through the pandemic as more people used it’s products and services to accommodate remote working. From June 2021 to 22, the company added 40,000 staff to its workforce, raising it 221,000 employees globally.

Business has since slowed, forcing tech companies to reign many of the expansions seen throughout the pandemic. For Microsoft, chief executive Nadella has claimed has promised to “treat our people with dignity and respect and act transparently.”

Nadella said the cuts were “difficult, but necessary” as the economy slowed and demand for tech products cooled. He added the tech industry was “unforgiving to anyone who doesn’t adapt”.

Speaking at the World Economic Forum, Nadella said: “At the end of the day, all of us are governed by what is happening in the world. Because no one can defy gravity, and the gravity here is inflation-adjusted economic growth. All [across] the world it’s been pretty weak.”