Microsoft, one of the world’s largest technology companies, is preparing to announce significant job cuts, according to reports from Sky News and The Verge. The software giant is said to be looking at cutting around 5 percent of its workforce, which would mean more than 10,000 layoffs for the company, which currently employs over 220,000 people.

The exact date for the expected cuts has not been confirmed, but a source familiar with Microsoft’s plans has told The Verge that the company will likely announce the layoffs on Wednesday, ahead of its quarterly earnings next week. Bloomberg is also reporting that a number of layoffs will be announced in Microsoft’s engineering divisions.

This news comes as a surprise, especially considering the fact that Microsoft has recently implemented a new unlimited time off policy. Employees who have an unused vacation balance will receive a one-time payout in April, and managers will be able to approve unlimited “Discretionary Time Off.”

The job cuts are said to be “significantly larger” than the 1 percent cut to Microsoft’s workforce last year, which affected positions in consulting and customer and partner solutions. The previous job cuts were made in response to the challenging economy, and it seems that this round of layoffs is also a response to the same economic pressures.

Microsoft CEO Satya Nadella recently warned of two years of challenges ahead for the technology industry. In an interview with CNBC, Nadella admitted that Microsoft was not “immune to the global changes” and spoke of the need for tech companies to be efficient.

“The next two years are probably going to be the most challenging,” said Nadella. “We did have a lot of acceleration during the pandemic, and there’s some amount of normalization of that demand. And on top of it, there is a real recession in some parts of the world.”

This news is a stark reminder of the harsh realities of the current economy and its impact on the tech industry. Microsoft’s job cuts come just days after the company implemented a new unlimited time off policy, and weeks after the CEO warned of two years of challenges ahead for the industry. While the company’s decision to cut jobs may be a difficult one, it’s a necessary step in ensuring the company’s long-term success in a challenging economic environment.

As the news of Microsoft’s layoffs spread, it’s important to remember the human impact of these job cuts. Thousands of people will be affected by this decision, and it’s important for the company to handle the process with empathy and sensitivity. The tech industry is a major driver of the global economy, and it’s crucial for companies like Microsoft to navigate these challenges and emerge stronger on the other side.