Servers rather than brains: the great reallocation of costs at Microsoft

The American IT group Microsoft presented Monday, October 26, a voluntary departure proposal to 60,000 employees across the United States, Canada, India and the United Kingdom. This measure, which concerns more than 27% of the company's overall workforce, comes 48 hours before the presentation of its quarterly results. This involves freeing up operating margins which would be reallocated towards the infrastructure expenses necessary for training and deploying artificial intelligence (AI) models.

Submitted by human resources director Amy Coleman, the internal memo specifies that the system does not set any age or seniority conditions. The measure affects functions ranging up to the office of vice-president. According to the operational terms revealed by the American media GeekWire, employees have a decision period ending at the beginning of December 2026, with compensation calculated on the scale of a classic economic dismissal.

A departure plan without seniority conditions targeting 60,000 employees

This expanded offer follows a first wave launched in April 2026. Restricted only to American employees at the end of their careers, this previous plan had recorded a membership rate greater than 30% on a pool of 9,000 targeted positions. The accounting expense associated with these departures had reached $900 million recorded in the quarterly balance sheet. For the new procedure, management anticipates a lower subscription rate but extended to a salary base seven times wider.

Unlike the practices observed among its competitors in Silicon Valley, which have favored waves of firm layoffs or the tightening of office presence controls to encourage resignations, Microsoft seeks to spread the cost of reducing its payroll over two consecutive accounting years.

The opening of this plan responds to the need to offset the explosion in capex (hardware investment expenditure), which amounted to $41 billion over the period from April to June 2026. Most of this liquidity is consumed by the construction of data centers, the reservation of electrical capacities and the supply of graphics processors from Nvidia.

The movement reflects a reallocation of capital across the technology industry. According to regulatory documents published by stock market regulators, Alphabet, Amazon, Meta and Microsoft plan to commit a cumulative amount of $700 billion in material investments in 2026. The contraction of personnel costs becomes the main adjustment lever to preserve the operational profitability demanded by the financial markets.

A tech sector-wide pay purge

If Microsoft management rejects the idea of ​​a direct replacement of positions by algorithms – “brains by servers” – the sectoral statements show a clear trade-off between salary expenses and IT capacities. According to the progress report published by the firm Challenger, Gray & Christmas, the reorientation of budgets towards artificial intelligence is cited to justify more than 116,000 job cuts in the United States between January and August 2026, or 21% of all downsizing announced across the Atlantic.

Machine-translated from French