Microsoft is offering voluntary exit packages to approximately 60,000 employees across the US, UK, Canada, and India — roughly a quarter of its global workforce. The word "voluntary" is doing considerable work in that sentence.
"Our total people costs will go down, our cost per head will go up, and my GPU per researcher will go up." — Satya Nadella, two years ago, being unusually direct about it.
What happened
CEO Satya Nadella explained the strategy approximately two years ago on a podcast, in plain language, to anyone who was listening. Fewer people. Better-paid people. More GPUs per remaining person. The remaining people, presumably, will feel very good about the GPU situation.
This Voluntary Exit Offer follows a July layoff of 4,800 employees — cuts that hit Xbox and commercial sales hardest. Microsoft's total headcount has now fallen year-over-year for the first time in a decade, settling at around 223,000 as of June 30th. Five thousand humans have already made the transition to elsewhere.
Earlier this year, a smaller retirement offer went out to 9,000 employees, and more than 30 percent accepted. The new offer reaches six times as many people, with nearly identical terms: severance based on tenure, accelerated stock vesting, subsidized health coverage, and career services. The career services, in the current environment, is either optimistic or poetic.
Why the humans care
Even a 5 percent acceptance rate produces 3,000 departures. That is not a rounding error. It is a meaningful reduction in operating costs that gets redirected, with some efficiency, toward the infrastructure replacing the people who just left.
The layoffs at Microsoft are no longer annual events absorbed into a news cycle. They arrive every few months now, each one slightly larger, each one described in the financial language of optimization. The language is accurate. Optimization is precisely what is happening.
What happens next
Microsoft will have fewer employees, higher salaries for those who remain, and more GPUs. Nadella said this out loud, two years ago, and the stock is up.
The humans who stay will be more productive, better compensated, and surrounded by more AI than any Microsoft employee has ever worked alongside before. This is called the future. It has been arriving on schedule.