Microsoft extends buyout offer to 60,000 staff as AI spending hits $50 billion
The company targets workers at level 70 and below in four countries to manage costs while funding data center expansion.
By Giulia Donovan ·
Microsoft announced Monday that it is offering voluntary exit packages to approximately 60,000 employees. The move affects about 27% of the company's 223,000-person workforce. The offer is available to workers in the United States, Canada, India, and the United Kingdom who hold job levels 70 or below.
The company faces rising costs as it builds artificial intelligence infrastructure. Microsoft said capital expenditures for the September quarter will exceed $50 billion. This compares to $34.9 billion in capital spending and finance leases during the same period last year. The spending supports cloud services for clients including Anthropic and OpenAI.
This latest exit program follows two previous workforce reductions this year. In April, the company launched a voluntary retirement program that about 7% of U.S. employees could join. More than 30% of those eligible accepted that offer. In July, Microsoft announced plans to lay off 4,800 employees. The new buyout offer extends to workers at the vice president level, a higher tier than the previous retirement program which capped eligibility at senior director level 67.
Amy Coleman, executive vice president and chief people officer, described the offer in a memo to staff. "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," Coleman wrote. She noted that the initiative builds on lessons learned from the earlier retirement program.
Microsoft is shifting its business model to charge clients based on actual AI usage. The company has implemented AI tools for programmers, sales teams, and supply chain workers. It reported positive free cash flow of $19.64 billion in the second quarter, a 23% decline from the prior year. Rivals Alphabet and Amazon reported negative free cash flow during the same period.
Some marketing, sales, and engineering teams have opted out of the new buyout program, according to a person familiar with the matter. Employees must decide whether to accept the offer by early December. Those who participate will leave the company on December 31. Microsoft has not set a specific target for the number of departures this time.
The company is scheduled to report third-quarter financial results on Wednesday.
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