Microsoft cuts 60,000 jobs to fund AI capex

What happened

Microsoft is offering a severance package to 60,000 employees as part of a cost-cutting strategy. The announcement came via a letter from Amy Coleman, the company's human resources lead, circulated on Monday. The offer targets vice-president level and lower employees in specific divisions across the United States, Canada, the United Kingdom and India.

The affected divisions reportedly include Xbox, Windows and Copilot, while marketing and sales staff appear exempt. This follows a voluntary retirement programme launched in July for long-serving older employees, of which about 30% of the 8,000 eligible staff accepted. The company frames the move as an opportunity for staff to transition with support and for the business to align its workforce with changing needs.

What this means for a European company

This restructuring highlights the extreme capital intensity of the current AI race. Even a giant like Microsoft, with massive revenue streams, is reshaping its cost base to fund AI infrastructure. For European companies, this signals that the public cloud providers they rely on are prioritising AI capex above all else. It reinforces the risk of depending on vendors who may cut support roles or shift focus abruptly to chase AI margins, potentially leaving enterprise customers with less stability.