Microsoft offered early retirement to thousands of long-serving employees on Thursday as it looks to thin its ranks amid major investments in artificial intelligence, according to an internal email from Amy Coleman, Microsoft’s chief people officer.
Eligible employees amounted to roughly 7 percent of the company’s U.S. work force, a person familiar with the program said. Microsoft employed about 125,000 workers in the United States at the end of its fiscal year in June.
“Many of these employees have spent years, and in some cases decades, shaping Microsoft into what it is today,” Ms. Coleman wrote in the email to staff.
The early retirement is being offered to U.S. workers who meet certain criteria: Their age plus their number of years at the company must total 70 or more. They also have to be at the senior director level or below and cannot be paid by sales incentive programs.
Microsoft and its big tech peers have been closely managing or culling the size of their work forces amid a spending spree to build the infrastructure for A.I. The companies are plowing cash into building data centers and filling them with the chips and other technologies needed to power advanced systems. As more data centers are built and used, the technology inside them begins to depreciate, putting pressure on profit margins. Cutting employees is one way companies can offset those costs.
Meta said on Thursday that it planned to trim 10 percent of its work force to free up money for its A.I. investments. “This is not an easy trade-off,” Janelle Gale, Meta’s chief people officer, said in a memo to employees.
Amazon trimmed roughly 30,000 corporate jobs over two rounds of layoffs late last year and early this year. And Microsoft went through rounds of layoffs last summer around the end of its fiscal year. Ms. Coleman indicated in her memo that the company was looking to reduce head count before the new fiscal year, which starts in July.
“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” she wrote.
The big tech companies are all slated to report their quarterly financial results next week. Microsoft, Amazon, Google and Meta spent more than $400 billion on capital expenditures last year, and all have told investors to brace for more spending on infrastructure like data centers this year.
Leave a Reply