Capitalism can seem so perverse. Take Microsoft, which is celebrating record financial performance by inviting 60,000 employees to consider continuing their careers outside the company. Voluntary redundancy may seem to make sense when a company's running out of cash, but Microsoft is dripping with the stuff.
It was a very good fiscal '26 at Redmond. Its Azure business is up over 40 percent, it's has 30 million paid seats on CoPilot, revenues are through the roof, and it has so much moolah it returned $10. 2 billion to shareholders in the form of dividends and share repurchases.
This latter move probably soothed CEO Satya Nadella, who suffered, due to the vagaries of C-suite reimbursement and incentive packages, a 6 percent cut in his pocket money. But as he’s also a stockholder with about 0. 01 percent of the company, his share of the cash return presumably eased the pain.
He won't have been offered redundo. Jenkins, the large wheelbarrow if you please. Microsoft, then, can afford all its employees, each who contributes about $1.
5 million to SatNad's bottom line. The "massive efficiencies and ROI of AI" make a great line for a company flogging magic LLM juice, but the evidence remains elusive. AI is, of course, still the reason.
Nothing else matters these days. It’s just that it's not today's AI. Among all the fulsome figures, analysts noted that Microsoft's capital expenditure wasn't as spendy as expected.
Quite a lot has been pushed into next calendar year, not because it's not there to be spent – Microsoft could build a 1:1 scale model of the Vatican filled with robot priests if it wanted – but because so much it wanted to mash the Buy Now button for was "Out of stock. More expected soon." This is bad.
MS added 88 datacenters in its most recent full financial year. That’s not enough datacenters for a cloud business expected to grow by half again in 2027, and hugely not enough to do the other thing. Lags in the cadence of deforestation, dewatering and detonation of the planet can't be tolerated.
Thus there are contracts signed to get things back on track PDQ, with mucho, mucho, mucho sponduiks. Microsoft is hinting, those selfsame analysts say, that it will have to go to the debt market and go into "negative free cash flow" territory in 2028. In other words, as well as spending its own bank, the company will be taking out massive loans.
This is why Billy and Bhavya Dev have to go. The cost of borrowing depends on the financial health of the borrower, and that boils down to how much profit you're making from the money you earn. A big round of redundancies, which are very costly in themselves, sits on the books of the year they happen.
The hole in expenditure left by the vanished salaries lives on. The capital must flow. Will this work?
Last week, we listed the reasons why it might not — price competition between rivals and increasingly powerful local and open weight models, supply side shortages, you know the litany by now. This week is Groundhog week, with fresh stories singing the same songs from different choirs. Any sensible soul, especially developers sitting on the sharp end of AI's forcible insertion into their working lives, will know how uncertain the job market is.
Voluntary redundancy is a very high stakes bet, and the game is very different if you're in an organization that's going downhill and may need to get rid of you later with far less cash available than if you're nominally making $1. 5 million in a place whose biggest problem is that it physically can't move into a bigger shell. On average, only 5 percent or so of those offered voluntary redundancy take it, which Microsoft HR will have factored in.
It's cold outside and snug within, so that may be on the high side. The biggest knock-on of such schemes is cultural, with only the very confident moving on out, a disproportionate loss of talent and role models. Hey, the cost of doing business, right?
For those who do decide to leave and watch the fireworks from outside the tent, part of the deal is career development resources. Sounds great, if anyone knows what technical careers will look like if either AI works and does indeed do all the work, or it fails and the global financial system throws a humongous wobble. Or anything in between.
So, here's an exercise in very dark humor quite fitting for the Halloween season. Ask your favorite AI what careers will be available for coders made redundant by AI. It will give you a long and plausible list.
Then ask it – and yourself – why AI won't be able to do any of those jobs too. Buying a truck and a wrench and calling yourself a plumber is probably safest. Nobody will ever want AI to fix their toilet.
Originally published at theregister.com
