Microsoft Corp., which sponsors the nation's eighth largest corporate defined contribution plan, based on Pensions & Investments data, plans to lay off thousands of workers in response to a gloomy economic backdrop.
Microsoft said in an 8-K filed with the SEC on Wednesday that it will reduce its workforce by about 10,000 employees by the end of the third fiscal quarter of 2023 in "response to macroeconomic conditions and changing customer priorities."
Microsoft has about 221,000 full-time workers, including 122,000 in the U.S., SEC filings show.
In a memo sent to Microsoft employees Wednesday, CEO Satya Nadella said eligible employees in the U.S. who are terminated "will receive a variety of benefits, including above-market severance pay, continuing health-care coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days' notice prior to termination." Benefits for employees outside the U.S. "will align with the employment laws in each country," Mr. Nadella added.
According to a Form 5500 filed July 29, Microsoft's Savings Plus 401(k) Plan had about $48 billion in assets and almost 149,000 participants as of Dec. 31, 2021.
Microsoft's 401(k) plan offers a 50-cent match for every pretax or Roth dollar saved, up to the IRS basic deferral limit, according to the company's benefits website. Employees' contribution as well as the Microsoft match are 100% vested from the first day of one's employment, the website indicated. In August, the company joined the list of nearly a dozen employers sued for ERISA violations in offering a BlackRock index target-date series.
A Microsoft spokeswoman said in an email that "the company doesn't have anything further to share here at this time."
A spokesman for Fidelity Management Trust Co., the trustee and third-party administrator for Microsoft's 401(k) plan, declined to comment.
P&I will publish its full list of the nation's largest 1,000 retirement plans on Feb. 13.