Layoffs are underway at Nuance Communications, the speech-recognition company acquired by Microsoft for $19.7 billion, as the company directs its attention towards its healthcare business.

According to the Boston Globe, Nuance CEO Mark Benjamin informed employees about the job cuts through an internal memo, without providing specific details regarding the number of affected staff members or departments. 

"We continue to see macroeconomic pressures affect our industries, as well as market shifts that are evolving our customers' needs," Benjamin wrote in the email, reported IANS. 

In addition, he emphasised the critical importance of preserving the company's capacity to make essential investments in its various businesses. This strategic approach aims to ensure the fulfilment of current plans and capitalise on future opportunities that lie ahead.

"In order to do this, we made the difficult decision this week to eliminate some positions across the company," Benjamin was quoted as saying, according to the same IANS report. 

In an unprecedented tech deal, Microsoft made headlines in April 2021 with the announcement of its acquisition of Nuance Communications, a leading speech-recognition company. The transaction, valued at $19.7 billion, marked a significant milestone for both companies and was completed entirely in cash.

With the acquisition, Microsoft expressed its intention to leverage the combined solutions and expertise to introduce innovative cloud and AI capabilities across various industries, particularly in the healthcare sector. 

As a distinguished trailblazer in the field, Nuance specialises in conversational AI and offers advanced cloud-based ambient clinical intelligence solutions tailored for healthcare providers.

"Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI," Microsoft CEO Satya Nadella had said.

Nuance's acquisition for $19.7 billion marked Microsoft's second largest purchase after LinkedIn, which was acquired for $27 billion in 2016. In recent months, Microsoft made headlines by announcing a company-wide layoff plan, resulting in the reduction of 10,000 employees. 

In response to the ongoing global macroeconomic challenges impacting the technology industry, Microsoft has decided not to provide salary raises for salaried employees, including senior leaders, this year.