60,000 Microsoft employees offered voluntary buyouts as AI buildout costs bite

Microsoft has offered voluntary buyouts to around 60,000 employees across the United States, Canada, India, and the United Kingdom. The employees, who must have an experience level of 70 or below, make up around 27% of the company's total workforce of 223,000 people, a CNBC report notes. This move comes hot on the heels of a similar move in April when the company announced its first-ever voluntary retirement program. That program was open to around 7% of the company's U.S.-based workforce, but it pales in comparison to this latest move. That time around, more than 30% of those eligible for the program took advantage of it.

The "Voluntary Exit Offer" was announced via a post on the Microsoft blog, penned by Amy Coleman, Microsoft's executive vice president in charge of people. "The Voluntary Exit Offer reflects an important part of how we’re evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter," Coleman explained, going on to say that the move "builds on what we learned" following the retirement program that was launched earlier in the year. Operationally, Coleman added that those who are eligible for the new program will receive an email with all of the relevant details today.

While the blog post points out that the Voluntary Exit Offer is a time-limited, voluntary program, the fact that it comes so soon after April's retirement program is notable. Companies run programs like this when they are looking for ways to slash their wage bills, something that Microsoft knows all about. The company is in the midst of an Xbox "reset" that includes a plan to cut 3,200 jobs by the end of the year. The company has also seen some studios close, with others merging and yet more being cut adrift to pursue life as independents.

As for why Microsoft has chosen now to make cuts, all fingers point to its ongoing AI data center plans. Last year, it announced plans to open the "world's most powerful" AI data center. Fairwater, in Mount Pleasant, Wisconsin, is now operational, with Microsoft lauding its closed-loop cooling system amid ongoing concern over the impact of data centers on local communities. Since 2023, Microsoft, Amazon, Google, and Meta have spent more than $1 trillion on AI infrastructure. AI data center investment is expected to skyrocket to $32 trillion by 2050, with Microsoft among those spending big.

All of this money has to come from somewhere. For Microsoft, at least some of that looks set to come from global salaries. It's unlikely this will be the last cost-cutting measure put forth by Microsoft execs, with Coleman adding that this voluntary exit program is just one "of the ways we’re trying to meet different business needs while continuing to create opportunities for our own people to grow and contribute."

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