Microsoft is planning a new round of layoffs while simultaneously investing $2.5 billion in a new AI implementation company.
Microsoft plans to cut thousands of jobs, according to Business Insider. This would involve less than 2.5 percent of its workforce. Additionally, the tech giant announced a $2.5 billion investment for its own AI implementation company: Microsoft Frontier Company. The timing of both announcements is striking. On one hand, the company wants to cut costs, but at the same time, it is investing heavily in AI initiatives and data centers.
Round of layoffs
Microsoft plans to cut thousands of jobs. The round of layoffs is expected to take place next week and affect departments such as sales, consultancy, and Xbox. This involves less than 2.5 percent of the workforce, which consists of 220,000 employees.
This is a ‘smaller cut’ compared to other rounds of layoffs. Last year, the company let go of 9,000 employees, which amounted to less than four percent of the workforce.
Microsoft Frontier Company
The timing does not seem coincidental. On Thursday, the company announced a $2.5 billion investment in a new operating company called Microsoft Frontier Company. That company is intended to deliver enterprise AI implementations using Microsoft’s existing AI tools.
Frontier Company was founded to support customers throughout their entire transformation journey, from design to implementation and continuous improvement of AI solutions. With an investment of $2.5 billion and 6,000 industry and engineering experts, the company aims to achieve measurable business results while protecting customer intelligence and ownership.
Furthermore, the tech giant is investing heavily in AI data centers, including recent projects in Portugal and Amsterdam. Whether the workforce reductions are linked to the large (AI) investments is not explicitly stated, but the timing is certainly noteworthy.