Home Commercial Microsoft Announces More Possible Cuts to Office Space

Microsoft Announces More Possible Cuts to Office Space

Microsoft, Redmond, Puget Sound, Meta, Amazon, Seattle, Kilroy Realty
Courtesy of Microsoft

By Kate Snyder

As the Puget Sound grapples with tech companies dropping office space, Microsoft has heralded that more could be to come, according to the company’s most recent earnings report. In that report, Microsoft highlighted decisions made to align the firm’s cost structure with its revenue and customer demand, prioritize investments in strategic areas as well as consolidate office space.

“We are consolidating our leases to create higher density across our workspaces,” the earnings report states, “which will also impact our financial results through the remainder of fiscal year 2023, and we may make similar decisions in future periods as we continue to evaluate our real estate needs.”

The report also references the Redmond-based firm’s planned reduction of its overall workforce by approximately 10,000 jobs through the third quarter of fiscal year 2023 – less than 5 percent of its total employee base – and allocating capital and talent to areas of secular growth and long-term competitiveness while divesting in other areas.

“Our industry is dynamic and highly competitive, with frequent changes in both technologies and business models,” the report states. “Each industry shift is an opportunity to conceive new products, new technologies, or new ideas that can further transform the industry and our business.”

Microsoft is one of several major players in the tech sector decreasing office space throughout the Puget Sound region. Meta and Amazon have made similar moves to either not renew leases or place large swaths of space on the sublease market. According to previous reporting by The Registry, Microsoft had already intended to let go of approximately 1.7 million square feet, and Meta plans to sublease the offices it occupies at Arbor Block 333 on Eight Avenue in Seattle. Amazon is looking to shed the roughly 370,000 square feet it occupies in the Kilroy Realty-owned 28-story West 8th Tower also located on Eight Avenue.

In another move that’s become a trend throughout the tech sector, Amazon has also announced it would be letting go of 18,000 employees while Meta has announced a reduction in force of 11,000 employees.

Microsoft’s recent earnings report noted that projections about future business plans are based on current expectations and assumptions that could potentially change over time. Any estimates are subject to risks and uncertainties that may cause different results.

“We must continue to evolve and adapt over an extended time in pace with this changing environment,” the firm’s earnings report states. “The investments we are making in infrastructure and devices will continue to increase our operating costs and may decrease our operating margins.”