Microsoft (MS) is set to lay off up to 60,000 employees as part of a strategy to cut costs and secure funding for its investments in artificial intelligence (AI).
On October 26, Business Insider reported that Amy Coleman, MS Chief People Officer (CPO), announced the introduction of a voluntary exit option (VEO) in an internal memo, stating, "We are providing new options for employees considering their future outside the company to transition their careers with support."
The voluntary layoffs will target employees below the vice president (VP) level in the United States, Canada, the United Kingdom, and India. The number of eligible employees could reach approximately 60,000, which represents about 27% of the company's global full-time workforce of 223,000 as of June 30.
According to Bloomberg, departments such as Windows, Copilot, Xbox, and finance are included in the voluntary layoffs, while data centers, marketing, and cybersecurity departments are excluded.
The severance package will be consistent with MS's standard retirement package in the U.S. Eligible employees will receive their base salary for a minimum of 60 days while remaining employed, with additional pay based on their position and tenure.
Employees must decide whether to apply by early December, and those who apply will leave the company by the end of the year, pending final approval from the company. However, MS plans to persuade key talent to stay if they apply for the voluntary exit.
This move is seen as a strategy to streamline the workforce and reduce costs amid significant investments in AI infrastructure, with MS's capital expenditure (CapEx) planned at $175 billion (approximately 232 trillion won) this year.
This is not the first instance of workforce reduction at MS. In April, the company implemented a voluntary retirement program for senior employees whose age and tenure combined exceeded 70 years. In July, MS also laid off 4,800 employees, primarily in the gaming sector, including Xbox.
Coleman stated, "This voluntary exit program is an important part of how our approach to change is evolving, creating greater flexibility and providing employees with more ways to plan their next steps."
As AI infrastructure investment becomes a top priority for big tech companies, workforce reductions are becoming a trend across the industry.
In January 2023, Google laid off about 12,000 employees, or 6% of its workforce. Since then, it has expanded voluntary exit programs across various departments and conducted additional layoffs in some areas. Meta also reduced its workforce from approximately 86,000 at the end of 2022 to about 67,000 by the end of 2023, resulting from unilateral large-scale layoffs rather than voluntary exits.
Meanwhile, on the New York Stock Exchange, MS shares closed at $532.60, up 1.54% from the previous trading day.
* This article has been translated by AI.
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