Microsoft CFO Amy Hood has revealed that the software giant is expecting its workforce headcount to decrease in the coming quarters. Speaking with analysts during an earnings conference call earlier this week, Hood stated, "We continue to evolve how we operate to increase our pace and agility, and therefore we expect headcount will decrease year over year."
Job Cuts and Buyouts Continue
Hood's comments follow the company's recent job cuts. Last month, Microsoft offered buyouts to its long-serving employees as a cost-cutting measure. The buyout impacted around 7% of its U.S. workforce. Prior to the earnings call, Hood sent a memo to Microsoft staff highlighting "increased pace" and "tighter, more accountable squads" amid organizational changes.
Cloud and AI Revenue Growth
According to a Business Insider report, the memo noted Microsoft cloud revenue of $54.5 billion for the quarter and AI revenue surpassing $37 billion in annual run rate, up 123%. "Our quarterly results include clear examples of strong customer adoption and the progress we are making," Hood said, adding that the fourth quarter was the company's "biggest quarter of the year."
During the earnings call, Microsoft reported $83 billion in quarterly revenue and $32 billion in net income. Hood forecasted 39% to 40% growth for the company's Azure business.
First-Ever Voluntary Employee Buyout
Microsoft announced its first voluntary employee buyout in the company's 51-year history. In an internal memo, the company said it is offering voluntary retirement to personnel whose years of service plus age total 70 or more. The one-time retirement program excludes some senior roles or those on sales incentive plans. Eligible employees and their managers will receive details on May 7.
As of June 2025, the company had 228,000 employees, with 125,000 in the U.S., making about 8,750 workers eligible. Microsoft is also reportedly adjusting how it doles out stock for annual rewards. The company will no longer require managers to tie stock directly to cash bonuses, giving "managers more flexibility to meaningfully recognize high performance," according to the memo.
