Microsoft (NASDAQ: MSFT) has launched a voluntary buyout program covering roughly 60,000 employees, a move aimed at reining in expenses while it pours billions into artificial intelligence infrastructure. The offer is available to eligible staff in the US, Canada, India, and the UK at experience level 70 or below, according to an internal memo reviewed by Reuters.
As of June 30, 2026, Microsoft employed 223,000 full-time workers globally, meaning the eligible group represents more than a quarter of its workforce. Divisions including AI experiences, Copilot, finance, human resources, Xbox, and Windows + Devices are included, while marketing, commercial business, and security teams are excluded.
Chief People Officer Amy Coleman said in the memo that the program gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support. It also provides participating organizations another way to adapt their workforce to changing needs. The offer is time-limited and voluntary, building on insights from an earlier voluntary retirement initiative.
AI Investments Pressure Spending
The buyout offer comes as Microsoft commits enormous sums to data centers, advanced chips, and other infrastructure needed to support AI services. The spending has drawn scrutiny from investors concerned about how quickly these investments will translate into sustainable revenue and profits. Microsoft has forecast $175 billion in capital expenditure for the 2026 calendar year.
In July, the company said capital expenditure for the September quarter would exceed $50 billion, compared with $34.9 billion in capital spending and finance leases during the same quarter a year earlier. The company is scheduled to report its first-quarter results after markets close on Wednesday, putting its spending plans and returns from AI investments in focus.
Microsoft is also transforming its business model, increasingly seeking to charge customers according to their use of AI services. It has equipped programmers, sales teams, and supply chain workers with AI tools and has observed noticeable results, while reassessing the skills and staffing required to pursue its next phase of growth. The challenge is to adapt the workforce without undermining the company's financial position.
In the second quarter, Microsoft generated $19.64 billion in positive free cash flow, down 23% from a year earlier. Cloud competitors Alphabet and Amazon both reported negative free cash flow during the period.
Buyouts Follow Earlier Retirement Offer and Job Cuts
The latest program follows a series of workforce changes at Microsoft this year. In April, the company introduced its first voluntary retirement program, open to about 7% of its US employees, or roughly 9,000 workers. Microsoft said in July that more than 30% of employees eligible for that program had accepted the offer.
The earlier initiative was available to employees at senior director level 67 or below. The new program extends eligibility to experience level 70, reaching higher into the organization, including some vice presidents, according to a person familiar with the matter. Microsoft has not set a target for the number of employees it expects to leave under the latest offer. Some marketing, sales, and engineering teams have decided not to participate, the person added.
Employees must decide whether to accept the offer in early December, with participating staff expected to leave on December 31. In July, Microsoft also announced plans to cut 4,800 jobs, or about 2.1% of its global workforce, as it restructured its Xbox gaming business. The changes included plans to divest up to five studios as the company sought to improve returns after years of heavy investment in gaming.
The latest buyout offer gives employees another route to leave voluntarily, rather than relying exclusively on compulsory redundancies to adjust staffing levels.
Companies Across Sectors Rethink Workforce Needs
Microsoft's move comes amid a wider wave of job cuts and restructuring as companies seek to control costs, improve efficiency, and expand their use of AI. Last week, American Express said it would eliminate 5% of its global workforce as it prepares for AI to take over more internal processes. Barclays also announced plans to eliminate about 5,000 jobs this year as the UK bank expands its use of AI and pursues a broader cost-cutting program.
Meta, the parent company of Facebook and Instagram, announced plans in April to cut 10% of its workforce, or about 8,000 employees, to improve efficiency. Amazon has also announced multiple rounds of job cuts, including reductions in its retail division.
This article is for informational purposes only and does not constitute financial advice.
