Microsoft Buyouts: 60,000 Employees Offered Voluntary Exit

Microsoft is offering voluntary buyouts to a huge share of its workforce. On Monday, Oct. 26, the company announced a Voluntary Exit Offer for eligible employees in the U.S., Canada, India and the U.K., and about 60,000 people, roughly 27% of its 223,000 employees, are eligible, according to CNBC and the Associated Press. "Microsoft layoffs," "Microsoft buyouts" and "Microsoft stock" pushed the company's name past 50,000 U.S. searches in a day on Google Trends. Here is what we know about who is eligible, what the offers include and why Microsoft is doing this now.

Not investment advice. This article reports company statements and news coverage. It is not a recommendation to buy or sell any security or to accept or decline any employment offer.

What we know

Who is eligible

In a memo posted to the company blog, Chief People Officer Amy Coleman wrote that the 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." She described it as a "time-limited, voluntary program" offering "financial support and career planning resources."

Not every team is participating. "Some organizations are providing the Voluntary Exit Offer, and some are not," Coleman wrote, depending on "each business's priorities, customer commitments and workforce needs."

• Included teams, per a Reuters source cited by NBC News: AI experiences, Copilot, finance, human resources, Xbox, and Windows + Devices.
• Excluded units, per the same source: marketing, commercial business and security. CNBC separately reported that some marketing, sales and engineering teams chose not to participate.
• Seniority: Microsoft's internal levels run from 59 at entry level to 70, the vice president level, Business Insider explained. The new offer reaches higher than the company's earlier retirement program, which was open to senior directors and below, according to CNBC.

What the offers include

Business Insider reviewed individual offers, which vary by level, location and tenure. In the U.S., they align with Microsoft's standard severance:

Source: Business Insider's review of U.S. offers. Offers outside the U.S. may differ.

Key dates

Employees must decide by early December, and those who accept will leave on Dec. 31, according to CNBC and Business Insider. A Microsoft spokesperson told Business Insider there are no plans for another buyout at this time, and CNBC's source said the company does not have a target number of departures.

Why Microsoft is doing this

The buyouts come as Microsoft spends enormous sums on AI infrastructure. The company supplies cloud computing to Anthropic, OpenAI and many other customers, and said in July that capital expenditures for the September quarter would exceed $50 billion, compared with $34.9 billion in capital spending and finance leases a year earlier, CNBC reported. Like other tech giants, it faces investor scrutiny over whether those returns will justify the cost, Reuters noted.

"This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," Coleman wrote. "It also gives participating organizations another way to adapt their workforce to changing needs."

How it fits with earlier cuts

Sources: CNBC, Business Insider, NBC News/Reuters.

Microsoft said in July that more than 30% of those eligible for the retirement program took it, according to CNBC. Business Insider noted that Google also offered buyouts to staff in one of its business units earlier this year, and HR professionals it spoke to said buyouts can soften job cuts but risk losing talent when offered to workers of all tenures.

How Microsoft describes the change

Coleman framed the program as part of a broader shift in how Microsoft manages change. The 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," she wrote, adding that it "builds on what we learned earlier this year through the Voluntary Retirement Program."

She also said the company would keep helping people "build new skills and, where it makes sense, find new opportunities across Microsoft," and acknowledged, "There is no one-size-fits-all approach for every team or every employee." She closed with a pledge "to continue to provide clarity, listen and learn and keep improving."

CNBC noted that the new offer arrives six months after the first-ever retirement program, which was limited to a small set of U.S. workers, while this one spans four countries and goes up to the vice president level.

What employees should know

• Check your email. Coleman said eligible employees would receive an email with a link to their offer details within hours of the announcement.
• Offers are individual. Terms depend on level, location and years of service, per Business Insider.
• It is voluntary. The company calls it a choice, not a layoff. Coleman wrote, "The Voluntary Exit Offer is new for us. We'll learn from it."

What's next

1. Earnings on Oct. 28. Microsoft reports fiscal first-quarter results after the market closes Wednesday, Reuters reported. Analysts are likely to ask about AI spending and the buyout program.
2. Early December decision deadline for eligible employees.
3. Dec. 31 departures for those who accept.

The bottom line

Microsoft is giving about a quarter of its workforce the option to leave with severance-style terms as it pours money into AI. How many accept, and whether it is followed by other cost moves, will become clearer after Wednesday's earnings and December's deadline. For more money news, see the SSI November payment schedule, the mortgage executive order and our explainer on Anthropic's IPO filing.