Confirming earlier reports of a big job cut coming in at Microsoft, Satya Nadella, CEO of the Redmond-HQed big tech major, confirmed that 10,000 employees will be laid off. In a memo sent to company employees, Nadella said that that the company will be “making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3.”

As predicted earlier, this accounts to nearly 5% of the overall 220,000 workforce, currently exiting at Microsoft.

Nadella, in his memo, has highlighted what the entire digital tech industry is going through. While there was a surge in digital spending during and for some time after the pandemic, companies are now scaling back to pre-pandemic levels. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one”, adds Nadella in his memo.

Intriguingly though, Microsoft has not just laid off redundant workforce, but has also let go off employees in its gaming divisions — which off late have been real revenue-makers for the company. According to a Bloomberg report, some people at Bethesda Game Studios, maker of the upcoming Starfield, as well as 343 Industries, the company behind 2021’s Halo Infinite, were affected.

Microsoft said it still plans to hire people in strategic, competitive areas, such as artificial intelligence, but many other departments were losing staff, including its HoloLens goggles business and some engineering divisions, Bloomberg reported.