Meta Platforms Inc and Microsoft Corp have both taken drastic actions to trim their workforces in an effort to streamline their operations and offset heavy spending on artificial intelligence (AI).
Meta on Thursday told personnel in an internal memo that it planned to cut 10 percent of workers, or about 8,000 employees, starting on May 20. The social media company also said it would not fill 6,000 open roles.
Earlier in the day, Microsoft issued its own memo offering voluntary buyouts to thousands of its US employees. About 7 percent of the US workforce would be eligible for the buyouts, a person familiar with the planning said.
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The company has never previously done buyouts of this scale, said the person, who requested anonymity to discuss an internal matter.
Microsoft had 125,000 employees in the US as of June last year. That would make about 8,750 workers eligible for the program.
Technology companies have been looking for ways to trim their expenses as they pour billions into data centers and other infrastructure to meet demand for AI services.
Microsoft is racing to construct data centers around the world, and this month announced new AI investments in Japan and Australia. Meta has forecast record capital expenditure this year, and has announced several multibillion-dollar deals with AI partners over the past few months. Both companies have instituted several rounds of layoffs.
Meta alluded to its AI spending in the memo, which was written by chief people officer Janelle Gale.
“We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making,” she wrote in the note.
Meta employees have spent much of the year fretting about job cuts, which already hit the Reality Labs division and other teams. Gale said that the company was announcing the layoffs early since details of the plan had already leaked. Reuters first reported on Meta’s planned workforce reductions earlier this month.
“I know this is unwelcome news and confirming this puts everyone in an uneasy state, but we feel this is the best path forward, given the circumstances,” Gale wrote.
Microsoft’s buyout program is being offered to workers whose years of service plus their age totals 70 or more, excluding some senior roles or those on sales incentive plans, according to the memo from chief people officer Amy Coleman.
“I’ve never seen the company move with this level of urgency and pace, and I see the intensity and agility you bring every day,” Coleman wrote. “To sustain this pace, we have to stay focused on doing great work, trusting and empowering our managers, and simplifying to support everyone.”
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