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Microsoft offers buyouts to about 60,000 employees

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Microsoft is offering voluntary buyouts to roughly 60,000 employees, about 27 percent of its 223,000-person workforce. The backdrop is the huge cost of its AI data center build-out.

By: Mikola Máté Patrik · · 2 min read

Microsoft Building 92 on the Redmond campus with the Microsoft logo sign in front
Image: Coolcaesar / Wikimedia Commons · CC BY-SA · CC BY-SA 4.0, Coolcaesar, via Wikimedia Commons, resized · Source

What is happening?

Microsoft announced a new Voluntary Exit Offer on Monday for employees in the US, Canada, India and the UK at experience level 70 or below (CNBC). That reaches up to the vice president level. According to a person familiar with the matter cited by CNBC, around 60,000 people are eligible, about 27 percent of the 223,000-person workforce.

Employees must decide in early December, and those who accept will leave on December 31. Some marketing, sales and engineering teams are not participating. The source said there is no target this time.

Why now?

AI data centers weigh on the balance sheet. Microsoft said in July that September-quarter capital expenditures would exceed $50 billion, up from $34.9 billion a year earlier. Free cash flow is still positive, but it fell 23 percent to $19.64 billion in the second quarter.

This is the company's third workforce move this year. In April it launched a voluntary retirement program (about 7 percent of US employees were eligible and more than 30 percent of them took it), and in July it announced 4,800 layoffs. Microsoft is also shifting its business model toward charging clients for actual AI usage, and has equipped programmers, sellers and supply chain staff with AI tools.

What to watch

Quarterly results are due on Wednesday. They will show how much Microsoft is actually spending on AI infrastructure and how far the savings can offset it.

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