Microsoft CEO Satya Nadella sent an email to the company's nearly quarter-million employees today to explain why the cloud provider is shelling out $1.2 billion to lay off slightly less than 5% of its total workforce. According to the email, those 10,000 jobs are no longer needed to meet the cloud hyperscaler's long-term goals or customer demand in light of the continued advancement of artificial intelligence (AI) and shuttered enterprise spending caused by economic uncertainty.

Nadella noted Microsoft will take the $1.2 billion charge related to severance costs, hardware portfolio changes, and lease consolidation costs. "We are committed to ensuring all those whose roles are eliminated have our full support during these transitions," he explained, citing extended health care coverage, career transitions services, and 60-days notice for U.S.-benefit-eligible employees. "We will treat our people with dignity and respect, and act transparently."

Microsoft, which invested $1 billion in 2019 in OpenAI – the company behind the viral AI natural language processing model ChatGPT – expects the next wave of computing will be "born with advances in AI," Nadella wrote to employees, suggesting automation and AI are primed to limit Microsoft's need for human headcount.

Expanding on the context in which Microsoft is striving "to deliver results on an ongoing basis while investing in our long-term opportunity," Nadella explained the pandemic accelerated enterprises' digital transformation budgets, but current economic environments are pushing organizations across industries and geographies to "exercise caution" in terms of tech spending.

To that point, the cloud provider plans to "align our cost structure with our revenue and where we see customer demand," the CEO wrote. "It’s important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas."

Microsoft's job cuts follow those of fellow tech giants Salesforce and Amazon earlier this month.

Amazon CEO Andy Jassy explained in a note shared with employees that “this year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years." He added the cuts would impact more than 18,000 employees, building on the 10,000 job cuts announced last November.

Salesforce’s layoffs will impact more than 7,000 employees at the cloud services giant and also includes real estate and office divestitures. The company's co-CEO Marc Benioff took the blame, noting Salesforce hired too many new employees in the face of a slowing economy.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” he wrote in a letter to employees.