Microsoft has offered approximately 60,000 employees (about 27% of its total global workforce) the option to voluntarily leave the company in exchange for financial compensation. Phew, that’s a lot! There has never been such a counteroffer in the entire history of Bill Gates' corporation.
Microsoft has offered approximately 60,000 employees (about 27% of its total global workforce) the option to voluntarily leave the company in exchange for financial compensation. Phew, that’s a lot! There has never been such a counteroffer in the entire history of Bill Gates' corporation.
This offer applies to employees of certain divisions in the US, Canada, the UK, and India. Not Ukraine yet, which is good.
The reason, which we’ve all probably seen in the press, is that the company is reallocating its spending in favor of artificial intelligence.
I’ll tell you this: this reason is really good. But first, we need to deal with all the prerequisites. And the first prerequisite is COVID.
Remember, during the pandemic, the world saw an explosive growth in cloud services and tools for remote work. Due to lockdowns, millions of companies, schools, and universities were forced to urgently move their activities online. Therefore, the demand for the Microsoft Azure cloud platform soared. The corporate messenger and video calling service Microsoft Teams became a critically important tool, and the number of its active users quickly exceeded 145 million per day.
To maintain, scale, and ensure the stability of this infrastructure, the company needed thousands of new engineers and developers. The company’s staff grew from 144,000 people in 2019 to 221,000 in mid-2022.
Many thought that people’s remote work habits had changed forever, and that a large number of specialists would be needed to support these services. But instead, we were all hit by a new wave of change that, on the contrary, required a sharp reduction in staff.
Microsoft, like many other IT companies in the world, found itself caught in a perfect storm, where the amplitude of the wave turned out to be extremely high. At the peak of the wave was a surplus of "Covid personnel", at the bottom — AI, which automates jobs.
Thus, the company has transformed from a giant in the field of enterprise software into a powerful infrastructure company that puts artificial intelligence at the forefront.
Thanks to a large-scale partnership with OpenAI, the corporation’s capital expenditures have grown rapidly — from a modest $15.44 billion in fiscal year 2020 to an impressive $115.95 billion in 2026.
This surge in costs was driven by a global race to build data centers, develop energy, and purchase thousands of specialized AI microchips (including Nvidia graphics processors).
What is fundamental here? Investing in people is no longer Bill Gates' top priority. Now the main thing is not to lose the physical race, but to invest in cloud power for AI.
Most likely, there will not be 60,000 people who will accept Gates' offer now. At best, it will be a third — that is, 20,000. But this does mean that the remaining 40,000 will continue to work peacefully. Voluntary dismissals will be followed by not-so-voluntary layoffs.
What is happening with Microsoft now (the focus is shifting from people to hardware) is a good marker for the entire IT market.
After Covid, there is no need for so many people in IT. And with the advent of AI, even more so. I think we will soon see similar stories in other companies, not only American ones. 2027 will be very interesting.
Competition will simply force companies to save on personnel. If you don’t save, someone else will. And it will lower the bills for customers.
By the way, the peak of the number of personnel of the largest Ukrainian outsourcing companies also fell at the beginning of 2022. After that, the staff began to gradually melt. According to DOU, EPAM Ukraine had 13,860 employees in 2022. Now it has 9,162. SoftServe has 11,082 (2022), now it has 6,900 people. Of course, there is another, third (in addition to post-pandemic and AI) important factor in Ukraine — war.
And finally, one more fact to think about: AI work is not taxed, while human work is. The more work AI does, the less taxes will be paid. And this, of course, must be taken into account when planning revenues for governments around the world.
