Microsoft lays off 4,800 and cites challenges in the AI ??sector as justification

Cuts affect approximately 2.1% of the company's workforce and are concentrated in two areas. Most of the layoffs occur in the commercial sales teams and in the Xbox division, according to an internal memo obtained by the American website The Verge.

Microsoft states that it is adjusting features, functions and the way it operates to respond to the new scenario. In an internal memo, the company's chief people officer, Amy Coleman, said: "The roles eliminated today are not being replaced by AI."

The executive acknowledged, however, that technology is changing routine within the company. "At the same time, what is true is that AI is changing the way work gets done," Coleman said in the same paper.

At Xbox, around 1,600 people are expected to be affected this round, with more cuts expected throughout the fiscal year. The plan is to reduce around 20% of jobs in the area by the end of the year.

The company is also selling four Xbox studios and is considering negotiating another to reorganize the business. The move is part of an effort to "restart" the operation after years of difficulties.

Coleman said the company tries to reduce the need for layoffs and reassign employees when possible. "Decisions like these are never easy, and you have my commitment that we are constantly looking for ways to reduce the need for job eliminations," he wrote.

RELOCATION AND VOLUNTARY RETIREMENT

Microsoft states that it has prioritized transferring people to new vacancies linked to areas considered strategic. "Whenever possible, our priority is to place people in new roles that align with the company's highest priorities and greatest areas of opportunity. Over the past year, we have reassigned more than 4,000 employees to new roles, including another 500 this month," Coleman said.

The company also tried to reduce cuts with a voluntary retirement program in the US. The initiative was aimed at employees whose combined age and length of service reached 70 or more, with benefits such as maintaining the health plan for five years, cash payments and six months of acquisition of shares that had not yet been released.

More than 30% of those eligible joined the program, according to the executive. "More than 30% of eligible employees chose to participate in our recent voluntary retirement program, and we will continue to explore similar approaches in the future," he said.

The head of people said that the company intends to maintain support for those affected and seek alternatives to further layoffs. "While this doesn't change the difficulty of Monday's news, we will continue to do everything we can to create opportunities for our people, reduce the need for job eliminations where possible, and responsibly support those affected with care and respect," he added.

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