Microsoft offers voluntary buyouts to 60,000 employees amid AI investments

Microsoft Corp. today issued voluntary buyout offers to about a quarter of its workforce.

The approximately 60,000 workers affected by the move are located in the U.S., Canada, India and the U.K. They reportedly all have a score of 70 or below on the company’s internal experience scale. That means the most senior employees affected by the job cuts are vice presidents.

Voluntary buyout programs give workers advanced notice of layoffs. Staffers who indicate that they wish to leave early usually receive more generous severance terms than in a standard restructuring initiative.

In the case of Microsoft’s buyout program, employees will have until early December to accept the offer. Workers who opt in will leave later that month.

Some marketing, sales and engineering teams have reportedly decided against participating. However, it’s unclear which specific business units are set to see job cuts.

It seems likely that Microsoft’s loss-making Xbox video game business is among the impacted groups. After the company let go 1,600 of the division’s employees in June, GeekWire reported that additional layoffs were expected.

According to Business Insider, workers with a score of 64 or below on Microsoft’s experience scale will receive one week of pay for every six months spent at the company. Staffers at levels 65 to 67 will receive two weeks. Microsoft will also provide stock vesting for six to 12 months, continued healthcare coverage for a limited amount of time and outplacement support. 

“The Voluntary Exit Offer is new for us. We’ll learn from it,” Microsoft Chief People Officer Amy Coleman wrote in a memo to employees. “At the same time, we’ll keep helping people focus on the work that matters most, build new skills and, where it makes sense, find new opportunities across Microsoft.”

The company is trimming its headcount despite the fact that it delivered strong financial results last quarter. Microsoft’s revenue grew 18% year-over-year in the three months ended June, to $90.01 billion, while its adjusted earnings of $4.74 per share topped the consensus estimate by more than 12%.

The job cuts may be part of an effort to make more funds available for Microsoft’s data center buildout. The company opened 31 new data centers last quarter, more than half the total number of cloud facilities it had at the start of the year. Microsoft expects to end 2026 with $175 million in capital expenditures. That’s down from the $190 billion the company projected by April, but still significantly above its 2025 spending.

Custom chips play an important role in the company’s’ efforts to reduce its data center costs. Earlier this month, Microsoft debuted an inference accelerator called Maia 300 that it says provides 40% more tokens per megawatt than leading graphics cards. The company revealed that it plans to make the Maia chip series its primary source of inference capacity.

Photo: Microsoft