One year after the last round of layoffs of approximately 9,100 employees, Microsoft ushered in the new fiscal year and launched a new round of layoffs today. The software giant will lay off about 4,800 employees this time, accounting for about 2.1% of its total global workforce. Most of the positions being laid off this time are part of Microsoft's enterprise sales business and Xbox gaming division.
Amy Coleman, chief human resources officer and executive vice president of Microsoft, issued an internal memo to all employees, explaining the reasons for the layoffs: changes in the technology industry environment, affected by changes in the artificial intelligence business, require Microsoft to deploy manpower, adjust job structures, and optimize the overall operating model.
Coleman made it clear: "I can honestly say that the positions eliminated this time will not be replaced by artificial intelligence; but it is undeniable that artificial intelligence is reshaping the way work is done."
About 1,600 employees in the Xbox department have been laid off this time. Microsoft plans to reduce the overall number of Xbox positions by 20% before the end of this fiscal year.
Affected by years of weak performance, Microsoft is strategically restarting its Xbox business. Not only is it selling four of its Xbox game studios, it is also considering spinning off another studio.
Coleman wrote: "Making such decisions is never extremely difficult. I promise everyone that the company will continue to find ways to reduce the scale of layoffs. Whenever there is a feasible solution, we will give priority to transferring employees to positions with broad development prospects in the company's core strategic direction. In the past year, more than 4,000 employees have completed internal transfers, and 500 personnel redeployments have been completed this month alone."
Previously, Microsoft also launched a voluntary retirement plan to try to avoid forced layoffs.
U.S. employees who meet the requirements of 70 years of combined age and length of service can apply for voluntary retirement. Retirement benefits include: five years of Microsoft health insurance coverage, one-time severance compensation, and six-month accelerated exercise of unvested options.
Coleman said: "More than 30% of eligible employees have participated in this voluntary retirement project, and we will explore similar optimization plans in the future. Even so, today's news of layoffs is still regrettable. The company will do its best to create development opportunities for employees and avoid layoffs as much as possible; for the affected employees, we will uphold care and respect and properly make follow-up arrangements."