Microsoft offers buyouts to 60,000 employees, nearly 27% of its workforce, as it cuts costs amid massive AI spending

Microsoft is offering voluntary buyouts to approximately 60,000 employees, nearly 27% of its global workforce, as the technology giant seeks to reduce costs and reshape its operations for the artificial intelligence era. The sweeping offer comes as Microsoft pours tens of billions of dollars into AI infrastructure, raising fresh questions about how the company plans to balance its aggressive spending with the cost of running its existing business.

The buyout program covers selected employees in the United States, Canada, India, and the United Kingdom, Bloomberg reported Monday, citing a Microsoft spokesperson. Eligible workers include some employees at the vice president level and below. Certain groups, including some data center, sales, and marketing personnel, are excluded.

“Microsoft Corp. will offer buyouts to about 60,000 workers, part of the company’s efforts to trim costs and retool its workforce for the artificial intelligence era. Personnel on select teams in the US, Canada, India and the UK at the vice president level and below will be eligible, a Microsoft spokesperson said. Certain pools of employees, including some focused on data centers, sales and marketing, aren’t eligible,” Bloomberg reported, citing the company spokesperson.

The scale is striking. Microsoft reported about 223,000 full-time employees as of June 30, 2026, in its latest annual filing. That puts the number of employees eligible for the buyout at more than one in four.

Microsoft has not disclosed how many employees it expects to accept the offer. The 60,000 figure represents eligible workers, not confirmed job cuts.

Microsoft offers employees a voluntary exit as it reshapes its workforce

In an official announcement published Monday, Microsoft’s Executive Vice President and Chief People Officer Amy Coleman introduced the new Voluntary Exit Offer (VEO), describing it as another way for employees to leave the company with financial assistance and career support.

“Today, we’re introducing a new Voluntary Exit Offer (VEO) to eligible employees within participating organizations. This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support. It also gives participating organizations another way to adapt their workforce to changing needs,” Coleman said.

The program is open to employees at Microsoft’s internal level 70 and below in participating organizations. Eligibility varies by department, depending on business priorities, customer commitments, and staffing requirements.

“This offer will be available to eligible employees in participating teams in Canada, India, the United Kingdom and the United States at level 70 and below. This is a time-limited, voluntary program that gives those who are eligible the opportunity to leave Microsoft with financial support and career planning resources. Some organizations are providing the Voluntary Exit Offer, and some are not. Participation varies based on each business’s priorities, customer commitments, and workforce needs,” Coleman added.

Employees who accept the offer will receive compensation comparable to Microsoft’s standard severance package, including tenure- and seniority-based payments, continued stock vesting, temporary healthcare coverage, and career transition services, GeekWire reported. Eligible workers have until the first week of December to decide.

The latest offer follows an earlier voluntary retirement program that targeted approximately 8,750 eligible employees in the United States. Around 30% accepted that offer, according to GeekWire.

Microsoft has continued reducing its workforce through other measures. The company eliminated about 4,800 positions in July and made further cuts in September, following more than 15,000 layoffs in 2025.

The new buyout initiative marks a broader approach to workforce reductions, giving employees the option to leave instead of relying exclusively on layoffs. Microsoft told GeekWire that layoffs remain an option depending on future business conditions.

Billions for AI, tighter controls on workforce costs

The timing highlights a growing tension inside Microsoft’s business. The company is committing extraordinary sums to AI infrastructure, including GPUs, servers, and data centers, yet it is simultaneously looking for ways to control operating expenses.

Microsoft reported $41 billion in capital expenditures during its fiscal fourth quarter ended June 30, 2026. During its July earnings call, the company projected approximately $175 billion in capital expenditures for calendar 2026, reflecting changes in how certain data center leases are classified.

Those investments are supporting Microsoft’s Azure cloud platform, AI services, and products such as Copilot. The spending is substantial, but so is the business funding it.

Microsoft reported $90 billion in quarterly revenue and $40.6 billion in operating income for the June quarter, increases of 18% from a year earlier. Its annual revenue reached $331.8 billion, underscoring the financial strength of a company undertaking another major workforce adjustment.

The financial results show Microsoft is hardly struggling to generate revenue. Instead, the company faces the challenge of funding enormous AI investments without allowing operating costs to grow unchecked.

The workforce changes raise a broader question about Microsoft’s future employment. As AI becomes more deeply integrated into software development, customer support, and corporate operations, the company is reassessing how its teams are organized and where it needs employees.

Microsoft has not said AI automation is directly replacing the employees eligible for the buyouts. Its official explanation centers on changing business needs and greater flexibility in managing its workforce.

Still, the contrast is difficult to ignore. Microsoft is spending billions to build the infrastructure for an AI-driven future, even as it offers more than a quarter of its workforce an opportunity to leave.

With Microsoft’s next quarterly earnings scheduled for October 28, investors may soon get a clearer picture of the buyout program’s financial implications and how the company plans to manage its growing AI investments.

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