We’re living in economically uncertain times — and paradoxical ones.
On the one hand, unemployment is low on a large scale. April’s jobless rate was just 4.2%. And unemployment, on a national level, has hovered in that range for roughly the past year.
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Inflation has also been cooling nicely. April’s Consumer Price Index reading showed a 2.3% annual rise, which is a notch below recent readings.
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Now 2.3% is still slightly above the Fed’s target 2% inflation range. But it’s a moderate level either way.
Despite economic indicators trending in a positive direction, many consumers and experts alike are worried about a near-term recession.
Tariff policies have the potential to lead to higher across costs the board. And they could drive a massive pullback in consumer spending, leading to a widespread slump.
Microsoft makes largest headcount cut since 2023.
Image source: Shutterstock
Americans worry about job loss
Although the economy is in seemingly decent shape, many people have concerns related to job loss.
A good 81% of U.S. workers today are worried about losing their jobs this year, says MyPerfectResume. And notably, roughly one-quarter have more concerns about job loss in 2025 than in 2024.
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Layoff fears may be particularly prevalent in the tech space.
Tech firms ramped up hiring during the pandemic when demand for their products surged. Forced remote work changed the landscape and paved the way to more jobs.
Since then, tech firms have been rethinking their headcount and taking steps to walk back that hiring spree..
Last month, Meta laid off employees in its Reality Labs division. And now, another tech giant is slashing its workforce.
Microsoft makes major staffing cuts
On May 12, Microsoft announced that it’s laying off roughly 3% of its headcount. The news will impact more than 6,000 people.
This new round of layoffs will be Microsoft’s biggest since 2023, when the company eliminated 10,000 roles.
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In January, Microsoft made a small round of layoffs, but those primarily targeted employees with performance issues. This latest round of layoffs does not relate to performance, the company said. Rather, the goal was to address extra layers of management.
The move comes a week after CrowdStrike announced that it’s laying off 5% of its staff.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement.
More Labor:
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But while it seems like Microsoft’s layoffs may be part of a targeted effort to dump unnecessary salaries and conserve costs, they pose a bigger question – is the worst yet to come?
As it is, workers are worried about a recession. And recessions and job loss often go hand in hand.
Microsoft stock is up year to date, and the company delivered better results than expected during its last earnings call. But given the general uncertainty that’s plaguing the labor market, it would be premature to call this latest round of Microsoft layoffs a standalone event.
Maurie Backman owns shares of Microsoft.
