Microsoft buyout offer reaches 60,000 staff

Microsoft is offering voluntary exit packages to approximately 60,000 employees, a group representing 27% of its total workforce of 223,000. The offer applies to workers in the United States, Canada, India, and the United Kingdom at experience level 70 or below, which includes the vice president level.

The primary driver for this expansion is the company's massive capital expenditure on artificial intelligence infrastructure. Microsoft reported in July that capital spending for the September quarter would exceed $50 billion, a sharp increase from the $34.9 billion spent in the same period a year prior. These investments are designed to meet the high computing demands of cloud clients such as OpenAI and Anthropic.

Amy Coleman, Microsoft's executive vice president and chief people officer, described the initiative in a memo to staff. She stated that the offer creates greater flexibility and allows employees to shape their next chapter. Coleman noted that this build on the lessons learned from the company's first voluntary retirement program in April, where about 7% of U.S. employees were eligible.

The company is shifting its business model to charge clients based on actual AI usage. This transition has led Microsoft to arm its programming, sales, and supply chain teams with AI tools to improve efficiency. The goal is to maintain financial stability while ensuring the right talent remains in place for new growth opportunities. In the second quarter, Microsoft reported $19.64 billion in positive free cash flow, a 23% year over year decline, but it remained profitable while rivals Alphabet and Amazon reported negative free cash flow.

The previous voluntary retirement program in April was open to senior directors at level 67 and below, and more than 30% of eligible employees participated. The new initiative extends eligibility higher to the vice president level, though Microsoft has not set a specific participation target. Some marketing, sales, and engineering teams have already opted out of the new buyout process.

Employees must decide whether to accept the offer by early December. Those who participate will leave the company on December 31. Microsoft is scheduled to report its third quarter financial results on Wednesday.