AI eats up the budget: Microsoft lures 60,000 to the exit

Microsoft wants to save considerably on personnel costs and is therefore offering tens of thousands of employees a voluntary severance scheme. The American technology company is investing huge sums in artificial intelligence (AI) and at the same time wants to adapt its workforce to this new reality. Almost a quarter of all employees are eligible for the offer.

Approximately 60,000 Microsoft employees are given the opportunity to voluntarily leave the company in exchange for financial compensation. This is reported by Bloomberg. These are employees in the United States, Canada, India and the United Kingdom, among others.

The scheme applies to certain employees up to and including the level of vice president. Large business units such as Xbox, Windows, Copilot and the finance department are fully involved.

However, not everyone gets the same opportunity. Employees who deal with data centers, cybersecurity, sales, marketing and quantum computers are not covered in certain cases.

Microsoft emphasizes that this is not a forced dismissal round. Employees can decide for themselves whether to leave. Anyone who accepts the offer will receive compensation and additional provisions that are comparable to a usual dismissal scheme.

HR Director Amy Coleman said in an internal statement on Monday that Microsoft wants to support employees who are thinking about a future outside the company in that transition.

This is not the first time that Microsoft has offered such a scheme. In July, about 8,750 employees approaching retirement age received a similar proposal. More than thirty percent responded.

With the new scheme, Microsoft expects a significantly lower percentage of participants. As a result, it is still unclear how many employees will actually leave.

The staffing measure comes at a striking moment. Microsoft has been investing huge sums of money in artificial intelligence and the data centers needed to support this technology for years.

These investments are increasingly taking up the available budget. This leaves less money for other activities and the hiring of new employees.

At the end of June, Microsoft had about 223,000 employees. That number has hardly changed since 2022, despite the strong growth in sales.

In recent years, tens of thousands of jobs have already been lost at the technology company due to various layoffs.

Wednesday will be an important day for investors. Microsoft will then present its quarterly figures. In particular, it will be examined whether the huge investments in AI are now yielding sufficient financial results.

Microsoft shares rose by about one percent around noon in New York on Monday.

Microsoft is not alone in this development. Other big tech companies are also trying to cut staff costs to free up more money for artificial intelligence.

Google offered voluntary departure schemes at various departments last year. Meta, the parent company of Facebook and Instagram, now has more than 20,000 fewer employees than during the staff peak at the end of 2022.

Both companies are simultaneously among the largest investors in data centers.

The changes go beyond just cost savings. Technology companies increasingly expect employees to adapt to the rapid development of AI.

At Google, employees were even told earlier this year that those who did not want to fully commit to artificial intelligence could make use of a voluntary departure scheme.

Elon Musk also took a similar approach earlier. After his takeover of Twitter in 2022, he offered employees the choice of fully committing to a more intensive work culture or saying goodbye with a severance payment.

For Microsoft employees, the new offer now means a difficult trade-off. A severance payment can provide financial security, but finding a new job is not a matter of course.

Microsoft also keeps the option open to retain certain employees if they opt for the severance scheme. The company wants to prevent important employees from leaving with knowledge that is difficult to replace.