Microsoft will offer voluntary redundancy plans to company employees in the United States, the television network reported CNBC this Thursday (23). This will be the first time in the company’s 51-year history that this type of incentive package for layoffs has taken place.
The so-called “single retirement program”, which was reportedly announced in a memo, will be available to workers in senior director or lower positions whose age and years at the company add up to 70 or more. For example, an employee who is 45 years old and has been with the company for 25 years.
According to the report, around 7% of Microsoft employees in the US would be eligible. The information was obtained from a person familiar with the plans who requested anonymity because the number is not being released publicly.
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Eligible employees and their managers will receive details on May 7. Those with sales incentive plans will not be able to participate.
Last year, Microsoft carried out the largest mass layoff in two years, laying off more than 6,500 people, also according to CNBC. In 2023, the company had laid off around 10 thousand employees.
While, in the past, cuts came with the justification of bringing greater efficiency and reducing management layers, now layoffs take on new contours with the advancement of artificial intelligence.
Microsoft and other big techs, such as Alphabet and Amazon, have been increasing their investments in data centers to provide cloud customers with enough computing capacity to run generative AI models, and increasing spending to support the growing demand for artificial intelligence. At the same time, the market has been putting pressure on the shares of software companies, amid concerns that AI-based programming tools, such as those from Anthropic and OpenAI, could reduce the relevance or affect the business models of already consolidated companies.
