Microsoft posts a $36.6bn profit days after offering buyouts to 60,000 staff: the AI bill is being paid in jobs

Microsoft reported a profit of more than $36.6bn (£27.5bn) for the three months to the end of September, according to the BBC. Revenue rose 19% year on year to $92.3bn. Most of that growth came from Microsoft Cloud, its range of enterprise technology services, where revenue grew 30%. Shares rose almost 2.9% in after-hours trading in New York.

The timing matters. On Monday, the BBC reports, Microsoft said it would offer buyouts to about 60,000 workers to cut costs while it pours billions into artificial intelligence. The company employs more than 220,000 people, so the offer covers over a quarter of its staff. It is a voluntary redundancy scheme for eligible teams in Canada, India, the UK and the US. Microsoft describes it as adapting the workforce to "changing needs" and says departing staff get financial support and career-planning resources.

The wider context is spending. Amazon, Meta and Alphabet are expected to spend more than $700bn this year on AI chips and infrastructure such as data centres, the BBC notes. Investors are trying to work out whether that is sustainable. The same day showed two different answers. Alphabet reported a 25% drop in quarterly net profit, said it would keep spending heavily on AI, and saw its shares fall 9.75%. In its filing, Microsoft lists "substantial investments" in AI among the uncertainties that could affect its finances. CEO Satya Nadella said AI is delivering "real-world impact across every industry."

**Our reading.** This is not a company in trouble cutting to survive. It is a very profitable company changing its cost structure, moving money from salaries to compute. That is a new pattern and it should be named plainly. Some of the jobs leaving Microsoft are effectively paying for the data centres. Calling the buyouts "voluntary" softens the message. It does not change what it means for the tens of thousands of people deciding whether to take them. It fits our running thesis on employment: the effect is real and unevenly spread, and it shows up first inside the companies building the technology.

The quarter also says something about where value is going. Cloud growing 30% is the clearest sign yet that the market is paying for AI infrastructure and distribution, the plumbing, and not only for clever models. Alphabet's results are the warning: heavy spending without matching profit gets punished fast. Over the long run we remain optimistic. Cheaper, more widely available compute is the base layer for the abundance AI could bring. In the short run, the cost of getting there is being paid by workers, and companies posting record profits owe them more than career-planning resources. What to watch is how many people take the buyouts, and whether the rest of Big Tech copies the model of rising profits and shrinking headcount.