Microsoft to lay off 10,000 employees, take $1.2B charge in Q2 (update)
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Microsoft (NASDAQ:MSFT) said on Wednesday that it would lay off 10,000 employees around the world and take a $1.2B charge related to the job cuts in its fiscal second-quarter. 
In a letter to employees, CEO Satya Nadella said the job cuts are less than 5 percent of the company's total workforce, but that it would continue to hire in some "key strategic areas."
"It's important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas," Nadella wrote. "We know this is a challenging time for each person impacted. The senior leadership team and I are committed that as we go through this process, we will do so in the most thoughtful and transparent way possible."
In addition, Microsoft (MSFT) also said it would initiate "lease consolidation as we create higher density across our workspaces."
Redmond, Washington-based Microsoft (MSFT) added that the $1.2B charge would negatively impact second-quarter earnings per share by 12 cents.
Microsoft (MSFT) shares were down more than 1% in early Wednesday trading.
On Tuesday, it was reported that Microsoft (MSFT) was set to make layoffs across its organization at a scale much larger than previous layoff rounds.
Wedbush Securities analyst Dan Ives said that Microsoft's (MSFT) layoffs is one more anecdote for the clock striking "midnight" as the tech sector slows down after a decade of strong growth. 
"This is a rip the band-aid off moment to preserve margins and cut costs in a softer macro, a strategy the Street will continue to applaud as management teams navigate this Category 5 near-term economic storm," Ives, who has an outperform rating on Microsoft (MSFT), wrote in a note to clients. 
Microsoft (MSFT) is slated to report fiscal second-quarter results on January 24.
Guggenheim analyst John DiFucci recently downgraded his rating on Microsoft (MSFT) to sell, citing the potential for a disappointing forecast.