Microsoft offers buyouts to 60,000 workers as AI spending strains its budget
The voluntary exit program covers over a quarter of Microsoft's global staff, as the company pours tens of billions into AI data centers.
What happened: Microsoft is offering voluntary buyouts to as many as 60,000 employees - about 27% of its 223,000-person global workforce - in the US, UK, Canada and India. Chief people officer Amy Coleman told staff it gives people who are 'considering a future outside the company' a supported way to leave, or lets teams reshape without another layoff round. It follows an April voluntary-retirement program (about 9,000 eligible) and a July layoff of 4,800 workers, mostly in Xbox and sales. This time Microsoft says the offer isn't based on age, tenure or performance.
Why it matters: Microsoft's AI buildout is costly: data-center capital spending is expected to top $50 billion this quarter, up from $34.9 billion a year earlier, and free cash flow is down 23% year over year even though it stayed positive. The company is also reshaping how it charges customers around actual AI use, and says the technology has brought 'noticeable results' for some programmers and sales staff. But a National Bureau of Economic Research survey of 9,000 executives found 90% hadn't yet seen AI boost productivity at their companies, making the efficiency case harder to prove.
How it works, plainly: The offer covers staff at job 'experience level 70 or below,' reaching up to vice president, across the eligible countries. AI experiences, Copilot, CoreAI, Windows+Devices, Xbox, finance and HR teams are in; cloud+AI and legal/corporate affairs are partially in; marketing, commercial sales, cybersecurity, data centers and quantum teams are excluded entirely. Employees must decide by early December, with those who leave departing December 31. Unlike April's program, Microsoft says it has no set target for how many should take it.
What comes next: Microsoft reports quarterly earnings this week, where investors will scrutinize AI spending against cash flow. The company says it may offer more voluntary exits later 'where there is a business need,' and Xbox is reportedly bracing for a separate layoff round. Microsoft isn't alone: Meta cut about 8,000 jobs and Oracle cut 21,000 this year amid similar AI-driven cost pressure, even as the productivity payoff from all this AI spending remains unproven by Microsoft's own data.