Microsoft CEO Satya Nadella

Thanks to cyber, Microsoft is keeping its Israeli employees - for the time being

Even though the cyber center of the technology giant is located in Israel, in the event of a worsening recession in the U.S., its employees and the employees of the company's R&D center in Israel will also face layoffs

The United States is on the path to recession and sadly, most experts don't really know how to gauge its severity. Technology giants such as Microsoft, Meta, Intel and others are probably aware of this and are feeling the heat with a severe drop in share prices: the value of all technology giants combined has decreased in the last year by hundreds of billions of dollars.
1 View gallery
מנכ"ל מיקרוסופט סאטיה נאדלה ב פורום הכלכלי העולמי ב דאבוס
מנכ"ל מיקרוסופט סאטיה נאדלה ב פורום הכלכלי העולמי ב דאבוס
Microsoft CEO Satya Nadella
(Photo: AFP)
Despite this, Microsoft has carried on business as usual and from its earnings reports it seemed to be weathering the storm. The company's CEO, Satya Nadella, expressed optimism in May, when the company reported significantly improved compensation for its employees out of a desire to retain the best of them.
By the way, there is no contradiction between the company's desire to retain its high-quality employees and the layoffs the company is currently undergoing and it is not expected to affect it significantly. In fact, in July the company announced its intention to reduce its workforce by 1% and, at the same time, hire additional employees. It is not clear if the current move is part of the same announcement, but already in its report on the results of the previous quarter, the company recorded an expense of $113 million for compensation payments.
The recent layoffs are part of the legitimization of the layoff process in many U.S. companies that have discovered they have recruited too many employees and now have to deal with large expenses for wages, as well as with the problem of hidden unemployment and improper allocation of personnel.
The company has two centers in Israel. The first is the research and development center led by Michal Braverman-Blumenstyk, which employs over 2,700 people. The second is the sales center in Israel, which employs hundreds of employees. The two centers have not officially responded to the reports of layoffs and the estimates are that the current wave has skipped over Israel for the time being - with an emphasis on "for the time being."
The center of Microsoft's activity in the cyber field, which is considered critical for companies of this size, is located here. Therefore, as mentioned, downsizing in Israel today is probably not the company's top priority and it is easier to cut in other places where there is a significant surplus.
However, as the recession becomes more significant, and consumption in the United States will suffer further blows, the step of laying off employees will become more common and on a more significant scale. Meanwhile, for a company that employs 220,000 people, the layoff of 1,000 employees is more of a message to the company's employees and the market: pay attention, we are no longer in 2021.