Microsoft extends voluntary exit package to 60,000 staff

Microsoft announced on Monday that it is extending a voluntary exit offer to approximately 60,000 employees. The package targets workers in the United States, Canada, India, and the United Kingdom who hold experience level 70 or below. A person familiar with the internal matter, who asked not to be named, confirmed the eligibility numbers. This group represents roughly 27% of the company's total workforce of 223,000.

The move comes as Microsoft balances its aggressive spending on artificial intelligence against the need for capital efficiency. The company is building out data centers to handle high computing demand for cloud services provided to clients like Anthropic and OpenAI. Capital expenditures for the September quarter are projected to exceed $50 billion. That figure marks a sharp increase from the $34.9 billion spent in the same period a year earlier.

These rising costs have already impacted the company's financial profile. In April, Microsoft introduced a first-ever voluntary retirement program, which about 7% of U.S. employees were eligible to join. Following that, the company announced plans in July to lay off 4,800 workers. The new buyout offer expands on those previous efforts.

Amy Coleman, Microsoft's executive vice president and chief people officer, addressed the staff in a memo. She stated that the offer reflects an evolving approach to change by creating greater flexibility. Coleman noted that the initiative builds on lessons learned from the earlier voluntary retirement program.

The company is also shifting its business model to charge clients based on AI usage. Microsoft has equipped programmers, sales teams, and supply chain workers with AI tools and reported noticeable results. The goal is to retain the right talent for new growth opportunities while maintaining a strong financial position. In the second quarter, Microsoft reported positive free cash flow of $19.64 billion, a 23% decline year over year, though it remained positive unlike rivals Alphabet and Amazon.

Some marketing, sales, and engineering teams have opted out of the new buyout, according to the person familiar with the plan. Employees must decide whether to accept the offer by early December. Those who participate will depart the company on December 31.

The new initiative reaches a higher level of seniority than the previous retirement program. The earlier offer applied to staff at director level 67 and below, while the current package extends to the vice president level. Microsoft does not have a specific target number of departures for this round. The company is scheduled to report its third-quarter results on Wednesday.