Microsoft Offers Buyouts to 60,000 Employees as AI Spending Strains Its Finances
About 27% of Microsoft's workforce in four countries is eligible for a voluntary exit offer, but the company tells The Seattle Times it expects only 3% to 5% to accept.
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Microsoft is offering voluntary buyouts to about 60,000 employees in the U.S., Canada, India and the United Kingdom, about 27% of its 223,000-person workforce, CNBC reported on October 26. The company expects few to take the offer. A spokesperson told The Seattle Times the acceptance rate could be as low as 3% to 5%, or fewer than 3,000 people.
Photo: ChiemSeherin / Pixabay
The offer at a glance
| Item | Detail |
|---|---|
| Eligible employees | About 60,000, per a person familiar (CNBC) |
| Share of workforce | About 27% of 223,000 |
| Countries | U.S., Canada, India, U.K. |
| Level | Experience level 70 or below, up to vice president |
| Package | Standard severance based on location (Seattle Times) |
| Decision deadline | Early December |
| Departure date | Dec. 31, 2026 |
| Expected uptake | 3% to 5%, per a spokesperson (Seattle Times) |
How it works
The "Voluntary Exit Offer" covers workers at experience level 70 or below, which reaches up to the vice president level, CNBC reported. That goes higher than Microsoft's April voluntary retirement program, which was open at senior director level 67 and below. According to The Seattle Times, the new deals offer standard severance and are not sweetened the way the retirement packages were.
Not every team is taking part. An internal memo viewed by The Seattle Times shows gaming, Windows, Copilot, human resources and finance fully participating. AI, legal and cloud teams are partially participating, and marketing, commercial business and security are not taking part. CNBC's source said some marketing, sales and engineering teams opted out. That person also said Microsoft has no target this time, while the spokesperson gave The Seattle Times the 3% to 5% estimate, based on similar offers at other companies.
"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," Chief People Officer Amy Coleman wrote in a memo quoted by CNBC. "This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," she wrote, according to The Seattle Times.
The AI spending behind it
CNBC ties the move to Microsoft's effort to balance a costly AI infrastructure build-out with capital efficiency. Microsoft said in July that capital expenditures for the September quarter should exceed $50 billion, compared with $34.9 billion in capital spending and finance leases a year earlier. The company supplies cloud computing to Anthropic, OpenAI and others.
Microsoft still produced $19.64 billion in free cash flow in the second quarter, down 23% from a year earlier, CNBC noted. Cloud rivals Alphabet and Amazon both reported negative free cash flow in that period.
A year of cuts
The buyouts follow April's first-ever voluntary retirement program. CNBC said about 7% of U.S. employees were eligible. The Seattle Times put that at more than 8,700 workers, about a third of whom accepted. Microsoft also announced 4,800 layoffs in July. Microsoft took a $900 million charge for the retirement program, The Seattle Times reported. It said it laid off about 15,000 people in 2025, though overall headcount has stayed roughly flat because of reskilling and new hiring.
Coleman has said the workforce reductions are not about replacing people with AI agents, The Seattle Times reported. She described them as shedding outdated roles as AI changes the business.
What to watch
- Buyout charge. The Seattle Times said Microsoft may estimate the cost of the program alongside its quarterly results, as it did for the retirement offer.
- Uptake. Watch whether acceptances land near the 3% to 5% estimate. About a third of eligible workers took the retirement offer.
- Layoffs. Watch whether involuntary cuts follow if too few people accept.
More coverage is on our Artificial Intelligence hub.
How we reported this
We read CNBC's and The Seattle Times' reports in full and used only figures documented there, including CNBC's capital-spending figure of more than $50 billion for the September quarter. The 3% to 5% uptake estimate is attributed to The Seattle Times.
Published and fact-checked October 31, 2026.
Sources
- CNBC, Jordan Novet, "Microsoft offers voluntary buyouts to 60,000 employees as AI leads to efficiency push," Oct. 26, 2026: https://www.cnbc.com/2026/10/26/microsoft-msft-voluntary-buyouts.html
- The Seattle Times, Alex Halverson, "Microsoft offers buyouts to 60K employees, but expects low uptake," Oct. 26, 2026: https://www.seattletimes.com/business/microsoft/microsoft-offers-mass-buyouts-for-roughly-a-quarter-of-its-workforce/
DailyMech used AI tools to help research and draft this article; it was fact-checked by our editors.