MS Shocks Markets

● MS Shocks Markets

The unprecedented event that just occurred at Microsoft for the first time in 51 years should not be overlooked as a simple corporate voluntary retirement news.

In this article, we will point out in an objective news format why MS, which was thought to have conquered the global AI market by joining hands with OpenAI, suddenly drew its sword.Furthermore, we will perfectly uncover the ‘real signs of crisis facing the current AI market’ that ordinary YouTube channels or news absolutely do not tell you, along with the repercussions this event will have on the future investment market.If you read to the end, the hidden reality behind the outwardly glamorous AI technology and your economic perspective on how you view big tech companies in the future will completely change.

Microsoft’s First Large-Scale Voluntary Retirement Event in 51 Years Since Its Founding

[Fact Check] The Specific Targets and Scale of the Restructuring

Microsoft (MS) is carrying out a large-scale voluntary retirement program involving thousands of employees for the first time in 51 years since its founding in 1975.According to major foreign media outlets such as CNBC in the US recently, MS formalized a one-time retirement program targeting employees in the United States through an internal memo.The core point targets of this voluntary retirement are senior-level core point personnel below the senior director level whose combined age and years of service exceed the number ’70’.This is identified as a scale reaching a whopping 7% of the approximately 120,000 MS workforce currently in the US.Amy Coleman, Chief People Officer (CPO) of MS, announced that she intends to conclude this workforce reduction before July of this year, when the new fiscal year begins.She emphasized that she would spare no full support for the employees who have dedicated decades and built the current MS, and would provide them with the opportunity to choose their next steps themselves.

[Cause Analysis] Massive Artificial Intelligence Investment, But Painful Performance Slump

Why did MS make such an extreme choice now? Reuters analyzed this as a massive ‘dilemma’ faced by MS.MS has perfectly led the global AI trend since the end of 2022 by preemptively collaborating with OpenAI, the developer of ChatGPT.However, contrary to the glamorous title, the report card for ‘Microsoft 365 Copilot,’ the core point paid AI product that should have been an actual moneymaker, was dismal.Currently, the total number of MS365 subscribers reaches 450 million, but the proportion of those who actually pay to use Copilot remains at a mere 3% level.Despite astronomical artificial intelligence investment being injected into infrastructure construction, the recovery speed returning as actual revenue is falling far below market expectations.This disappointment was directly reflected in the market, resulting in a significant drop in MS’s big tech stock price, exceptionally so among major US big tech companies this year.Ultimately, despite having already carried out a workforce reduction once last summer, they embarked on an additional labor cost diet, unable to withstand the pressure of continuous poor performance.

The Real Key Takeaway of This Event That Others Do Not Mention (The Game Changer)

[In-Depth Analysis] The End of the AI Fantasy, the Cold Time for ‘Profitability Proof’

Other economic broadcasts or news outlets simply report this event as ‘workforce restructuring due to MS’s poor performance’ and end it there.However, as corporate investors in our 30s, the real key takeaway we must absolutely read here is something else entirely.It is precisely the point that a ‘massive gap’ between the speed of technological development and the speed at which customers open their wallets has been proven.We enthusiastically believed that we were standing at the center of the Fourth Industrial Revolution, but corporate clients (B2B) strictly began to weigh the cost-effectiveness against the Copilot subscription fee of 30 dollars per month.While it is true that AI is fascinating and useful, it means that MS has not yet provided a perfect answer to the question, “Does it truly bring immediate profit to my business?”This is not solely a problem for MS, but a common challenge facing all big tech companies, including Google, Amazon, and Meta.When analyzing the global economic outlook going forward, the market will now completely change its investment criteria from ‘who builds a smarter AI’ to ‘who achieves definite profitability improvement with AI.’Ultimately, this voluntary retirement of senior-level personnel by MS is the most definitive signal showing the painful reality of big tech companies that must cut fixed costs (labor costs) to cover the maintenance expenses of AI infrastructure, which has become a money-eating hippopotamus.

< Summary >

Event Summary: Microsoft is conducting a large-scale voluntary retirement of thousands (about 7%) targeting senior-level employees in the US (age + years of service 70 or older) before July, for the first time in 51 years since its founding.
Surface Cause: They executed massive investments through collaboration with OpenAI, but the penetration rate of the core point revenue model, ‘365 Copilot,’ stopped at 3% of total users, delaying the return on investment.
Market Reaction: Due to concerns over worsening profitability, the decline in MS’s stock price stands out prominently among major big tech companies this year.
Hidden Key Takeaway Insight: This event is not a simple restructuring, but a powerful signal fire announcing that the global AI market has transitioned from the stage of ‘technological competition’ to ‘profitability proof.’

*Source: SBS 뉴스

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