Company News

Reporter Zhang Quan

 

US tech giant Microsoft launched a voluntary resignation plan on the 26th, offering compensated options to approximately 60000 eligible employees, roughly equivalent to 27% of Microsoft's global workforce. As of the end of June this year, Microsoft had approximately 223000 full-time employees.

 

This is also Microsoft's second similar plan since April this year, involving a much larger number of personnel than before. Analysis suggests that the new plan aims to control costs and provide a "blood transfusion" for its hundreds of billions of dollars in artificial intelligence investment.

 

Microsoft Executive Vice President and Chief Human Resources Officer Amy Coleman stated in a memo sent to employees on Monday that this proposal provides eligible employees with new options to consider leaving the company to develop elsewhere and receive corresponding support. The plan is applicable to qualified employees with a rank of 70 or below in participating departments in the United States, Canada, India, and the United Kingdom, including senior management personnel. The sales department, some engineering teams, and some functional departments of the company are not within the scope of this plan.

 

Eligible employees need to decide whether to accept the plan before early December and resign at the end of the year. The compensation conditions for the voluntary resignation plan will be similar to the company's standard layoff compensation plan. The plan offered by Microsoft during its layoffs in the United States earlier this year included at least 60 days of basic salary, and for most employees, the company also provides up to 39 weeks of basic salary based on job level and length of service.

 

According to informed sources, the voluntary resignation plan in April this year is only open to senior director level and below employees (i.e. below level 67). In contrast, the new plan has a wider scope of application, covering the level of vice president. Microsoft has not set a specific target number for this time. This insider also stated that over 30% of employees accepted the voluntary resignation plan in April.

 

This is the third round of personnel adjustment for Microsoft this year. After Microsoft announced its first voluntary resignation plan for approximately 8750 American employees in April this year, it laid off 4800 employees in July, making Xbox's gaming business a hardest hit area. Behind Microsoft's continuous "slimming down" is the squeezing of budget by AI investment.

 

Around 2022, Microsoft began to invest heavily in the fields of AI and data centers, leading to a tightening of budgets and recruitment in other departments. The company announced its new quarterly financial report after the stock market closed on Wednesday, and it is predicted that its capital expenditure for the full year of 2026 will reach $175 billion. Investors will closely monitor whether the massive investment in AI can begin to realize returns.

 

Microsoft is not the only company that mobilizes resources for AI. This year, several technology companies announced layoffs due to the rise of artificial intelligence and increased investment in the technology. Meta announced in April that it plans to lay off 10% of its workforce, approximately 8000 employees, in order to improve efficiency. Amazon has cut its workforce multiple times, most recently in the retail department. In June, Oracle reduced its workforce by nearly 13%, cutting 21000 jobs.

 

In terms of financial situation, in the second quarter, Microsoft's cloud computing competitors Alphabet and Amazon both reported negative free cash flow, while Microsoft's free cash flow for the same period was $19.64 billion, a year-on-year decrease of 23%. Observers believe that Microsoft is in a period of business model transformation, attempting to charge based on the actual level of customer use of artificial intelligence. Its goal is to complete the transformation without weakening the financial situation. The new 'slimming' plan does not mean that Microsoft has fallen into financial crisis. More accurately, the time gap between the cost and return of AI investment is becoming a business issue that tech giants must face.

 

Some comments suggest that perhaps tech giants are solving the same arithmetic problem: using fewer people to build bigger models.

 

(Editor in charge: Zhu Xiaohang)