As the AI expenditure race intensifies, two of the largest tech companies in the world are reducing their workforces: Microsoft through buyouts and Meta through layoffs.
As it pours more and more money into artificial intelligence (AI) and the exorbitant compensation required to draw in AI expertise, Meta is eliminating about 8,000 jobs, or 10% of its workforce.
The company has recently announced the cuts, justifying them as an effort to increase efficiency and free up funds for its top priorities.
According to Bloomberg, which broke the story first, Meta intends to leave about 6,000 open positions.
Investors have already been informed by Meta that its expenses will skyrocket to between $162 billion (€143 billion) and $169 billion (€150 billion) next year due to infrastructure spending and the increasingly alluring compensation packages it is providing AI experts.
In a note to investors, Wedbush analyst Dan Ives expressed optimism about the cuts, stating that Meta was utilising AI tools to “automate tasks that once required large teams, allowing the company to streamline operations and reduce costs while maintaining productivity [and] driving an increased need for a leaner operating structure.”
Microsoft announced on Thursday that it was providing thousands of US workers with voluntary buyouts.
According to two people familiar with the proposal who were not permitted to talk publicly, the software giant intends to make offers to about 8,750 employees in early May, or about 7% of its US workforce.
Microsoft’s strategy allows employees to depart on their own terms, in contrast to Meta and Oracle’s blunter tool of mass layoffs.
However, the same underlying pressure—the high expense of developing AI infrastructure—is probably what drives the savings.
Microsoft has invested billions to maintain an ever-growing global network of data centers that support cloud computing, artificial intelligence (AI) systems, and its own productivity toolkit, which includes the AI assistant Copilot.
Microsoft stated that it wants to provide qualified employees “the choice to take that next step on their own terms, with generous company support,” according to a memo from Amy Coleman, the firm’s chief people officer, which CNBC reported.
