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Microsoft offers voluntary buyouts to 60,000 employees as it reshapes for AI era

Workers at vice-president level and below in four countries are eligible, with a deadline of early December to decide

By LineZotpaper AI staff

Published26 October 2026

Updated26 October 2026

Read Time3 min

Sources6 outlets

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Illustration: Microsoft offers voluntary buyouts to 60,000 employees as it reshapes for AI era

Microsoft is offering voluntary buyouts to approximately 60,000 employees, more than a quarter of its workforce, in a move to cut costs and reshape the company for the age of artificial intelligence, the software giant announced Monday. The offers, sent to eligible employees in the US, Canada, India and the UK, are the latest in a series of workforce adjustments that include a voluntary retirement program and layoffs earlier this year.

In a memo to staff, Microsoft Chief People Officer Amy Coleman said the Voluntary Exit Offer (VEO) gives eligible employees "the opportunity to leave Microsoft with financial support and career planning resources." 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," Coleman wrote.

Around 60,000 employees, or about 27 percent of Microsoft's total workforce of 223,000 people, are eligible, according to a person familiar with the matter. The buyout is open to workers at the company's experience level 70 and below, which includes vice presidents, but only those on participating teams. Some sales, marketing, data-centre and engineering teams are excluded, a Microsoft spokesperson told Business Insider.

The terms of the buyout are similar to Microsoft's standard severance. In the US, that includes a minimum of 60 days of base pay while employees remain on the payroll, and up to 39 weeks of base pay depending on seniority and tenure, according to offers reviewed by Business Insider.

Eligible employees must decide by early December whether to accept, and those who do will leave at the end of the year, the spokesperson said. Microsoft has no plans for another buyout at this time, but did not rule out future adjustments.

The buyout follows a Voluntary Retirement Program earlier this year that was offered to about 9,000 employees based on age and tenure. Roughly one-third of eligible workers accepted, which the company described as in line with expectations. That program, combined with a round of layoffs in July that affected 4,800 employees, helped Microsoft avoid deeper involuntary cuts.

Microsoft's spending on AI infrastructure has strained its finances. The company reported $19.64 billion in positive free cash flow for the second quarter, down 23 percent year over year, as it continues to invest heavily in data centres to support cloud services for OpenAI, Anthropic and other customers.

Microsoft reports its third-quarter earnings on Wednesday, and investors will be watching for signs that the company is balancing AI investment with profitability.

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Analysis

Why This Matters

The buyout affects a substantial portion of Microsoft's workforce and signals a strategic shift toward AI-focused roles, potentially reshaping the company's culture and capabilities.
It comes as Microsoft balances massive AI infrastructure spending with shareholder expectations for capital efficiency, a tension common across big tech.
The timeline, decision by early December, exit by year-end, suggests Microsoft wants workforce changes in place before its next fiscal year planning cycle.

Background

Microsoft has been adjusting its workforce throughout 2026. In April, it launched a Voluntary Retirement Program for about 9,000 US employees. In July, it laid off 4,800 workers. The new buyout is broader in scope, reaching vice-president-level employees, and is designed to reduce headcount without further involuntary layoffs. The company's AI push, including its Copilot products and cloud services for AI startups, has driven record data-centre spending, putting pressure on free cash flow.

What to Watch

Wednesday's third-quarter earnings report: How Microsoft frames its AI investment returns and cost discipline will be key.
The uptake rate of the buyout: If fewer than expected accept, Microsoft may face pressure for further involuntary cuts.
Whether similar buyout programs appear at other big tech firms, as the industry continues to prioritise AI spending over headcount.

Sources

Microsoft offers buyouts to 60,000 employees · The Verge
Microsoft offers voluntary buyouts to 60,000 employees as AI leads to efficiency push · CNBC
Microsoft offers buyouts to around 60,000 employees, reports say · TechCrunch
Microsoft offers mass buyouts for roughly a quarter of its workforce · Hacker News
Microsoft offers voluntary buyouts to 60,000 employees as AI leads to efficiency push · CNBC
Microsoft is offering buyouts to around 60,000 employees. Read the memo. · Business Insider

Checked

12 claims in this story checked against 1 source: 11 supported.

Show each claim

Partly supportedMicrosoft is offering buyouts to 60,000 employees.TechCrunch: “Microsoft is offering buyouts to around 60,000 employees, according to reports from Business Insider and Bloomberg .”
SupportedThe buyouts are Microsoft’s latest cost-cutting effort.TechCrunch: “The move marks Microsoft’s latest efforts to cut costs and rework its workforce for AI.”
SupportedReports from Business Insider and Bloomberg say Microsoft is offering buyouts to around 60,000 employees.TechCrunch: “Microsoft is offering buyouts to around 60,000 employees, according to reports from Business Insider and Bloomberg .”
SupportedMicrosoft is seeking to cut costs and reshape its workforce around AI.TechCrunch: “The move marks Microsoft’s latest efforts to cut costs and rework its workforce for AI.”
SupportedThe voluntary offer is for vice president-level employees and below on select teams in the United States, Canada, India and the United Kingdom.TechCrunch: “Employees at the vice president level and below on select teams in the U.S., Canada, India, and the U.K. will be eligible, the reports say.”
SupportedEmployees working in data centres, sales and marketing are among those excluded.TechCrunch: “Some employees, including those working in data centers, sales and marketing, are excluded.”
SupportedChief People Officer Amy Coleman sent employees a note about the buyouts on Monday.TechCrunch: “Microsoft’s Chief People Officer Amy Coleman sent a note to employees on Monday about the buyouts.”
SupportedColeman’s note said the offer reflects an effort to create greater flexibility and more ways for employees to shape their next chapter.TechCrunch: ““The Voluntary Exit 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,” the note reads.”
SupportedColeman’s note said the offer gives eligible employees considering a future outside the company a supported way to make that transition now.TechCrunch: ““This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support.””
SupportedEmployees who accept the buyout will receive benefits similar to a standard severance package.TechCrunch: “Employees who choose the offer will receive benefits similar to those offered in a standard severance package, the reports say.”
SupportedEarlier this year, more than 30% of roughly 8,750 eligible retirement-age employees accepted a Microsoft buyout offer.TechCrunch: “Earlier this year, Microsoft offered buyouts to retirement-age employees, with more than 30% of the roughly 8,750 eligible workers accepting.”
SupportedMicrosoft did not immediately respond to a request for comment from TechCrunch.TechCrunch: “Microsoft did not immediately respond to TechCrunch’s request for comment.”