Microsoft (MS) is accepting voluntary retirement applications from about 60,000 employees in four countries, including the United States. The move is aimed at easing the financial burden that has grown as it pours huge sums into expanding AI (artificial intelligence) infrastructure.
On the 26th (local time), MS said it is offering a voluntary retirement program to employees below the vice president level working in the United States, Canada, India and the United Kingdom. The Wall Street Journal (WSJ) reported the same day that MS has moved to cut its workforce to ease cost pressure while spending heavily on AI infrastructure. The eligible group is about 60,000 people, roughly 27% of MS’s total 223,000 employees as of the end of June. MS said it plans to provide eligible employees with financial support along with materials needed for career development. The employees will receive an email link outlining the detailed terms.
“The voluntary retirement offer is an important part of evolving our approach to change,” said Amy Coleman, MS’s chief human resources officer (CHRO). “It is about giving employees greater flexibility and, wherever possible, more ways to design their own next steps.” She added, “It builds on lessons learned from the voluntary retirement program we carried out earlier this year.”
Employees must decide whether to apply by early December, and those who apply will leave the company on Dec. 31. Some teams in marketing, sales and engineering were excluded from this round. Unlike the July program, which targeted only employees at the senior director level and below, this time the door is open up to vice president level. However, a person familiar with the matter said MS has not set a separate target headcount this time.
MS first offered a voluntary retirement program in April. At the time, about 8,600 people, roughly 7% of its U.S. employees, were eligible, and more than 30% of them are said to have accepted the offer. According to the person, the acceptance rate this time is expected to be much lower than then. In July, MS announced a plan to cut 4,800 positions, and earlier this year it also announced a plan to cut 3,200 staff in its Xbox division.
The move is tied to the burden of AI investment. As demand for AI computing surged, MS has steadily increased its data center investment. In July, it also projected that capital expenditure for the July-September quarter would exceed $50 billion. It is also pursuing AI-driven internal efficiency and a shift in its business model. MS’s position is that it is seeing results from applying AI tools in development, sales and supply chain functions.