“We are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employees,” said CEO Satya Nadella in a memo to employees posted on the company blog. Microsoft has a June fiscal year, so its third quarter ends in March.

The software giant is also taking a $1.2 billion charge.

It’s the latest in a wave of layoffs from — Alphabet to Amazon to Facebook — to hit the tech sector last year, with over 150,000 estimated in 2022. That’s due in part to a boom in hiring during the pandemic as demand for digital commerce and services hit a peak, combined with a current economic slowdown including slower demand from PCs to cloud services, and fear of a recession this year.

“We are seeing the clock strike midnight for the tech sector after a decade of hyper growth and now major layoffs are being seen at MSFT, Salesforce, Meta, Amazon, among many others across the Valley. This is a rip the band-aid off moment to preserve margins and cut costs in a softer macro,” said Wedbush analyst Dan Ives in note this morning.

Entertainment is also restructuring with layoffs and writeoffs across the industry as streaming faces economic headwinds and linear media continues to see secular declines.  

Microsoft said it will continue to hire in key strategic areas. And it’s still awaiting approval from regulators to close its $70 billion purchase of Activision-Blizzard.