Microsoft Offers Buyouts to 60,000 Employees as AI Spending Reshapes the Company

Microsoft is offering standard severance to roughly 60,000 employees in four countries, its second buyout of the year and the broadest it has tried.

Some vice presidents are eligible. The sales organization is not.

Microsoft wants to know how many of its people would leave if asked nicely. On Monday it asked about 60,000 of them.

Chief people officer Amy Coleman announced the Voluntary Exit Offer in a memo to staff, and eligible employees were told to expect an email with their terms within hours. The pool covers about 27% of a workforce that stood at 223,000 in June. CNBC first reported the size of it, and Microsoft confirmed the figure to GeekWire.

Eligibility runs up to level 70 on Microsoft's internal ladder in the U.S., Canada, the U.K. and India. That takes in general managers and some employees with vice president titles. Corporate vice presidents are left out, and so is any team whose leader chose not to participate.

Microsoft insists the offer doesn't mean it needs fewer people. Its own record makes that a hard sell. The company cut more than 15,000 jobs in 2025, ran a retirement buyout this spring, laid off 4,800 people in July and trimmed hundreds more in September.

Layoff terms, offered in advance

The package is the same one Microsoft gives people it lays off, according to GeekWire: base pay scaled to tenure and level, continued stock vesting, a fixed stretch of healthcare and career transition services. The extended health coverage that made the spring retirement deal worth taking is gone.

Nobody is screened out for age, tenure or performance. Employees have until the first week of December to decide, and anyone who accepts is out on December 31, CNBC reported.

Read plainly, Microsoft is putting its layoff terms on the table before it has to decide who gets laid off. For someone already interviewing elsewhere, or tired of waiting to find out whether their group survives the next reorg, that's a fair trade. For Microsoft, everyone who leaves this way picked the date themselves.

The company hasn't said how many takers it expects. It told GeekWire the share will be much smaller than the roughly 30% who took the spring offer, which went to long-tenured staff with more reason to go.

Microsoft has done this before, just never this broadly

Posts circulating Monday called this Microsoft's first-ever voluntary exit. It's the second this year. In April the company ran the first voluntary retirement program in its history, aimed at about 8,750 U.S. employees at senior director level or below whose age plus years of service cleared a threshold.

About 30% accepted. Microsoft took a $900 million charge for the program, and Coleman said afterward that those departures made the July layoffs smaller than they would otherwise have been.

That program was U.S.-only, tied to tenure and described as a one-off. Six months later it has a sequel that covers four countries, drops the tenure test and goes three levels higher, from 67 to 70. Coleman's memo calls the offer "new for us" and says Microsoft will learn from it. Back in July she told GeekWire the company was studying whether to run voluntary exits on a regular basis, possibly every year. Monday's memo suggests it has its answer.

Follow the capex

Microsoft spent $31.9 billion on capital expenditures in the March quarter, 49% more than a year earlier, per The Motley Fool. Most of that goes into data centers and chips. Investors will tolerate a bill that size as long as operating costs hold steady around it, and salaries are the operating cost Microsoft controls most directly.

The company has been tightening elsewhere too. It has put every division on a token budget for internal AI use and is moving workloads onto its own chips to get more out of each watt. Headcount fell from 228,000 to 223,000 in the year to June, and that was before the July cuts.

Last week we wrote about Barclays moving money from payroll into AI. Microsoft hasn't drawn that line out loud, and it says layoffs remain a separate tool it will keep using. The direction looks the same from here. Every seat that empties on December 31 comes off a cost base sitting next to one of the biggest capex budgets in the industry.

Who walks out the door

Large tech companies have mostly shed staff through layoffs, harsher performance reviews and return-to-office mandates. Buyouts have stayed rare because they hand the decision to the employee, and employees don't always decide the way the company would like.

The people most likely to take a severance check are the ones with somewhere better to go. With no performance screen, Microsoft can't stop its strongest engineers in a participating group from leaving alongside the people it would have cut anyway. Keeping the entire sales organization out of the program shows which talent Microsoft wasn't willing to gamble with.

Microsoft points to the more than 4,000 employees it redeployed into new roles over the past year as proof that people are moving around inside the company as well as out of it. That figure would mean more next to a hiring number, and the company hasn't offered one.

What comes next

Microsoft reports earnings Wednesday afternoon. It priced the retirement program on its April call, so look for a charge or estimate for this one, plus the September quarter's capex to see how far apart the two lines have drifted.

December matters more. If few people take the offer, Microsoft is back where it stood after the spring, with layoffs as the obvious next step. If a lot of them do, some groups will look very different on New Year's Day.

Coleman pitched the program as a way for employees to shape their next chapter. About 60,000 of them now have five weeks to decide whether that chapter starts somewhere else.