Microsoft Is Offering Buyouts to About a Quarter of Its Workforce

Keypoints

• Microsoft is offering voluntary buyouts to about 60,000 employees, roughly 27% of its 223,000 staff
• Eligible workers are in the US, Canada, India and the UK, at vice president level and below
• Employees must decide in December, and those who accept leave on December 31
• It is the second voluntary exit offer this year, after an April retirement program
• Microsoft reports quarterly earnings later today

Microsoft has just launched one of the biggest voluntary exit programs the tech world has ever seen. On Monday the company said about 60,000 employees can choose to take a buyout and leave. That is roughly 27% of everyone who works there.

The offer covers staff on select teams in the United States, Canada, India and the United Kingdom, at vice president level and below. Some groups are left out, including some people who work in data centers and in sales and marketing. The program is time limited. People have until December to say yes, and anyone who accepts will leave the company on December 31.

So why now? Microsoft is trying to balance a very expensive AI build-out with tighter spending elsewhere. It keeps pouring money into data centers because customers want more AI computing power, and it is looking for savings in other places. Chief people officer Amy Coleman told employees in a memo that the offer gives people who may be thinking about a future outside the company a way to make that move with support.

This is not the first time. In April, Microsoft ran its first ever voluntary retirement program, offered to about 7% of its US staff, or roughly 8,750 people. A bit over 30% of them took it. Before that, the company went through several rounds of layoffs starting in 2023, which together added up to more than 40,000 jobs.

It is important to remember that 60,000 is the number of people who are eligible, not the number who will leave. A Microsoft spokesperson pointed to similar programs at other big tech companies, where roughly 3% to 5% of eligible workers accepted. If acceptance looks more like April's 30%, about 18,000 people would go. That would tie the largest restructuring in Microsoft's history, which happened in 2014 when it cut 18,000 jobs after buying Nokia.

Investors will be watching closely. Microsoft reports earnings after the US market closes today, and the big questions are how much it is spending on AI and how it plans to pay for it.