Microsoft has once again launched a large-scale layoff plan at the beginning of the new fiscal year. After cutting about 9,100 employees last year, it has now announced the layoff of about 4,800 positions, accounting for about 2.1% of its total global workforce. This adjustment is mainly focused on Microsoft's commercial sales business and Xbox game department, showing the company's further shrinkage and reorganization in its business structure and strategic focus.
According to an internal memo sent to employees by Amy Coleman, executive vice president and chief people officer of Microsoft, the background of the layoffs is that the entire technology industry is undergoing profound changes, and the company needs to "adjust resources and job allocation, and change the way it operates" to deal with the impact of artificial intelligence on Microsoft and other technology companies. She emphasized that the eliminated positions were not directly replaced by artificial intelligence, but she also admitted that artificial intelligence was changing the specific form and method of work.
Among the specific layoff measures, the Xbox team became one of the hardest hit areas, with approximately 1,600 Xbox employees affected that day. Microsoft also plans to cut about 20% of Xbox jobs by the end of the current fiscal year. At the same time, the company is selling its four Xbox studios and evaluating the possibility of selling another studio to promote its so-called Xbox business "reset" after years of development setbacks. Regarding detailed reports on the sale of these studios and the impact, Microsoft has disclosed more information to the outside world.
Coleman said in the memo that such decisions "are never easy" and pledged that management will continue to look for ways to minimize the need to make organizational changes through layoffs. She said that when possible, the company prioritizes redeploying employees to new positions that align with Microsoft's highest strategic priorities and greatest growth opportunities. Over the past year, Microsoft has transferred more than 4,000 employees to new positions, of which about 500 have received new opportunities through internal adjustments this month alone.
In order to reduce the scale of forced layoffs, Microsoft has previously launched a voluntary retirement plan internally, hoping to optimize its manpower structure through flexible means. In this plan, employees in the United States can apply for voluntary retirement as long as the sum of their service length and age reaches 70 or above. The voluntary retirement package includes Microsoft Health Insurance coverage for up to five years, a one-time cash severance package, and accelerated vesting of unvested stock options for up to six months. Coleman said that more than 30% of eligible employees have chosen to participate in this voluntary retirement plan, and the company will continue to explore similar options in the future.
She also admitted that this does not eliminate the impact and difficulties caused by the current news of layoffs, but emphasized that Microsoft will try its best to create more opportunities for employees, reduce job layoffs where possible, and support affected employees in a "responsible and respectful way as much as possible" when personnel adjustments have to be made. With the start of the new fiscal year, Microsoft continues to increase investment in areas such as artificial intelligence and cloud computing, and this move to focus on optimizing commercial sales and the Xbox team further reflects its new priorities in resource allocation and its judgment on future growth directions.
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Microsoft plans a new round of layoffs involving thousands of employees, accounting for about 2.5% of the company's total headcount