Summary:
First CNBC reports MSFT's first-ever Voluntary Buyout in 51-Year Company History,
Then a report by BBG on Meta planning 10% Workforce Cut, All Within Hours
To note: Reuters First reported Meta's 10% cut late last week (report)
Meta Layoffs
First, Microsoft unveiled a voluntary buyout program, a move that could incentivize thousands of employees to leave.
Now, Meta Platforms has reportedly followed with plans to cut 10% of its workforce. Taken together, today's back-to-back announcements suggest that as Big Tech continues to spend aggressively on AI infrastructure and data center buildouts, management teams are trimming excess fat to reallocate capital toward the AI race.
Bloomberg reports that Meta plans to reduce its workforce by 10%, or roughly 8,000 employees, and leave 6,000 open roles unfilled. The layoffs are expected to occur on May 20.
Meta had nearly 79,000 employees at the end of last year, according to Bloomberg data.
The outlet cited an internal memo written by Janelle Gale, chief people officer, in which she said, "We're doing this as part of our continued effort to run the company more efficiently and to allow us to offset other investments we're making."
Meta shares are flat on the year but in-line in seasonal trends.
"I know this is unwelcome news, and confirming it puts everyone in an uneasy state, but we feel this is the best path forward, given the circumstances," Gale wrote.
Reuters first reported last week that Meta planned to cut 10% of its workforce (read here).
MSFT Plans First Voluntary Buyout In 51-Year History; Gates Foundation To Slash 20% Of Staff
Until early April, Microsoft shares were on track for their worst start to a year in Bloomberg data going back to 1997.
Then, in late March, The Information reported that the tech giant had imposed a hiring freeze across parts of its cloud and sales divisions.
Now, in yet another sign of belt-tightening, Microsoft is preparing its first voluntary employee buyout program in the company's 51-year history.
CNBC cites a new internal memo detailing a one-time retirement program for senior director-level employees and below whose combined years of employment and age total 70 or more.
While CNBC notes that voluntary buyouts are expected to involve a "small percentage of its workforce," a separate Bloomberg report states that the new voluntary retirement program could affect about 7% of its U.S. workforce.
Microsoft's latest annual report says it had about 126,000 employees in the U.S. The voluntary retirement program could allow the tech giant to cut upward of 9,000 employees. It reported 228,000 employees worldwide in 2025.
The adjustments to its workforce come as the hyperscaler is spending massive amounts of capital on data centers during the AI boom and heavy data-center spending cycle.
At the same time, Microsoft is changing how it rewards employees by separating stock awards from cash bonuses, giving managers more flexibility to reward top performers. It is also simplifying manager review choices, reducing compensation options from nine to five.
"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Amy Coleman, Microsoft's executive vice president and chief people officer, wrote in a memo.
Separately but still related, The Wall Street Journal reported earlier this week that the Gates Foundation is slashing up to 500 jobs, or about 20% of its staff, as the left-wing NGO has come under fire for funding questionable protests and for Gates' ties to Epstein.