Microsoft on Monday said it is offering buyout packages to roughly 60,000 employees—about 27% of its workforce—in a potentially monumental workforce restructuring as the company pours $175 billion into building its artificial intelligence capacity.
Key Facts
Microsoft, which will report its next quarterly earnings on Wednesday, is offering buyouts to eligible employees in the U.S., Canada, India and the United Kingdom in a move it says “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 eligible employees include almost all workers outside of the C-suite and executive level across divisions including Copilot, finance, human resources and Xbox, an unnamed source told Reuters, adding that marketing, commercial business and security will be excluded.
Employees must tell the company if they’ll take the offer in December and those who do will leave on Dec. 31, CNBC reported.
The move comes six months after Microsoft announced its first-ever voluntary early retirement program to about 7% (or roughly 8,750) of U.S. workers and, of those who received the offer, 30% took it, the company said.
Three months later, Microsoft laid off 4,800 employees.
Crucial Quote
“The Voluntary Exit Offer is new for us. We’ll learn from it,” Amy Coleman, executive vice president and chief people officer at Microsoft, said in the memo sent to employees Monday. “These are a few of the ways we’re trying to meet different business needs while continuing to create opportunities for our own people to grow and contribute.”
What to Watch for
How many people take the buyout. If 30% agree to leave, that’ll be about 18,000 workers no longer on the company’s payroll. That would tie it for the largest workforce restructuring in Microsoft history. The company cut 18,000 workers when it acquired Nokia in 2014.
Key background
Microsoft is facing massive financial pressure to control operating expenses and offset unprecedented capital expenditures associated with growing its artificial intelligence businesses. The company is committing between $175 billion and $190 billion in 2026 to data centers, liquid cooling, energy grids and custom AI hardware, and investors have become increasingly concerned companies are overspending on a technology that won’t pay back enough to be worth it. Microsoft’s role in the AI race centers around selling generative AI directly into corporate workflows through its Copilot software assistant. The company also rents the enormous cloud supercomputing capacity required to train and run cutting-edge models—including those of partner OpenAI—through its Azure platform. Microsoft projected Azure revenue growth of approximately 45% for the first quarter of fiscal year 2027.
Tangent
The latest employment report from career services firm Challenger, Gray and Christmas says the tech sector accounts for roughly 30% of all job cuts announced in 2026—more than any other industry. Oracle, founded by billionaire Larry Ellison, said this spring it would cut 20,000 to 30,000 employees; Amazon announced a total of roughly 30,000 corporate job cuts from late 2025 to early 2026 and Meta laid off about 8,000 employees starting in May. All three companies cited the need to free up billions of dollars in operating capital to build out their AI infrastructure.
Forbes Valuation
Bill Gates, co-founder of Microsoft, is worth an estimated $119 billion, making him the 16th-wealthiest person in the world Monday. His net worth has increased about 10% this year and Microsoft’s stock, of which he owns less than 1%, has risen 12% year to date. Other Microsoft billionaires include former CEO Steve Ballmer ($163.8 billion), current CEO Satya Nadella ($1.4 billion) and early employee Charles Simonyi ($8.8 billion).
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