Microsoft on Monday proposed buying back a quarter of its workforce, the company’s latest effort to control costs as it spends heavily on artificial intelligence.
Only some of the 60,000 employees offered a buyout are expected to accept it, the company said.
In a memo to staff, Amy Coleman, Microsoft’s chief human resources officer, wrote that the buyout is part of the company’s efforts to give employees more control over their future and also to “meet the diverse needs of the business while continuing to create opportunities for our own people to grow and contribute.” »
The “voluntary and time-limited” program grew out of the company’s very first buyouts earlier this year, she wrote. In April, Microsoft offered early retirement to 8,600 longtime U.S. employees, and about 30 percent of them accepted the offers and left over the summer. Microsoft said it had heard from other employees who would have accepted the buyout if they had been eligible. This informed the company’s decision to create this new, expanded program.
Between 3 and 5 percent of tech employees typically accept buyout offers, Microsoft said.
Like its big tech peers, Microsoft has been cutting costs to invest in the AI race. The company told investors it should expect its capital spending, largely on data centers and the chips to fill them, to total about $190 billion in 2026.
Microsoft has already reduced its workforce slightly even though business was booming. For several years, the company maintained a stable workforce of approximately 228,000 employees.
But as of June 30, the end of its fiscal year, Microsoft’s workforce was down slightly, to 223,000 employees. In the same fiscal year, Microsoft generated revenue of $332 billion, up 18% from the previous year, and profit up 31%, to $134 billion.
In July, Microsoft announced the elimination of 4,800 positions, notably in its video games division. The company is expected to report quarterly results on Wednesday.
Monday’s buyout offer was widespread – available to lower-level vice presidents – and was restricted to select teams in Canada, India, Britain and the United States. Some teams, like sales and others in engineering, were excluded.
The terms of the offer were less generous than those of the pension buyout, which partly explains why the company believes fewer people will take part. This new program offers the company’s standard severance package, which includes a minimum of eight weeks of base salary, and increases based on seniority. An employee’s last day would be December 31.
Gn headline
