Microsoft Offers Buyouts to 60,000 Employees Amid AI Investment Push

Microsoft announced on Monday that it is offering voluntary exit packages to approximately 60,000 employees across the United States, Canada, India, and the United Kingdom. The initiative affects workers at experience level 70 and below, representing about 27% of the company's total workforce of 223,000 people.

The software maker has been significantly increasing its spending on data centers to support high computing demand for artificial intelligence, supplying cloud services to prominent firms such as OpenAI and Anthropic. This heavy investment has placed strain on company finances, prompting leadership to explore ways to slim down the workforce without resorting to involuntary layoffs.

Amy Coleman, Microsoft's executive vice president and chief people officer, detailed the strategy in an internal memo sent to staff on Monday. "The Voluntary Exit Offer reflects an important part of how we're evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter," Coleman wrote, noting that the program builds on insights gained from an earlier retirement initiative.

The new voluntary program applies to eligible employees within participating teams up to the vice president level. However, certain divisions, including sales organizations, some engineering teams, and specific corporate functions, have chosen not to participate based on their individual business priorities and customer commitments.

Eligible staff members have until early December to decide whether to accept the buyout, with departing employees scheduled to leave the company on December 31. According to individuals familiar with the matter, the terms of the exit packages are comparable to Microsoft's standard severance policy, which provides base pay scaling with tenure and seniority.

This announcement follows a series of workforce reductions and restructuring steps taken by Microsoft over the past year. In April, the company introduced a voluntary retirement program aimed at U.S. employees, which saw an acceptance rate of over 30% among those eligible. That effort was followed in July by a round of layoffs affecting 4,800 workers.

Despite the heavy capital outlays required for its data center expansion, Microsoft continues to maintain positive cash flow, reporting $19.64 billion in positive free cash flow for the second quarter. The company is scheduled to report its latest financial results on Wednesday as markets closely monitor the financial impact of its ongoing artificial intelligence strategy.