Microsoft Opens Buyouts to 60,000 Staff as AI Spending Pressures Budgets

Microsoft opened a voluntary exit offer on Monday to roughly 60,000 employees — about 27% of its 223,000-person workforce — across the U.S., Canada, India and the United Kingdom. Eligible staff must decide by December, and those who accept will leave on December 31, 2026, according to a CNBC source.

The company has set no target headcount this time, the same source said. The program marks Microsoft's second voluntary departure effort of 2026 and lands as the company balances an expensive AI infrastructure buildout against capital efficiency.

Amy Coleman, executive vice president and chief people officer at Microsoft in Redmond, Washington, announced the offer in a memo to employees, which the company also published on its official blog.

"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. "This builds on what we learned earlier this year through the Voluntary Retirement Program."

Who qualifies for the voluntary exit offer?

The program covers eligible employees in participating teams at level 70 and below, Microsoft said. It is time-limited and offers financial support plus career planning resources. The memo does not detail the package; eligible workers were told to expect an email with their individual terms.

Microsoft's memo also omits a headcount figure — the 60,000 number comes from news reports. Notably, the offer reaches vice president level, one step above April's cutoff of senior director, according to CNBC's source.

For context on scale: April's program was open to about 7% of Microsoft's U.S. workforce, which Computerworld calculated at roughly 8,750 people. More than 30% of those eligible took it, Microsoft said in July. The new offer spans four countries and an eligible pool nearly seven times larger.

How does this connect to AI costs?

July also brought about 4,800 role eliminations, equal to 2.1% of Microsoft's global workforce. Coleman addressed the AI question directly in that month's memo.

"I also want to be direct that the roles eliminated today are not being replaced by AI," Coleman wrote. "At the same time, what is true is that AI is changing how work gets done."

Monday's coverage tied the new offer to cost pressure. CNBC reported that Microsoft generated $19.64 billion in free cash flow in the second quarter, down 23% from a year earlier — while Alphabet and Amazon reported negative free cash flow over the same period. Agence France-Presse described the buyout as a way to cut costs while pouring money into AI. Coleman's October memo does not mention AI spending or costs. Microsoft reports quarterly earnings on Wednesday.

Which teams are in — and which are out?

Participation varies by business. Microsoft said some organizations are offering the program and some are not, depending on each business's priorities, customer commitments and workforce needs.

A source told Reuters the offer covers divisions including AI experiences, Copilot, finance, human resources, Xbox and Windows + Devices. It excludes marketing, the commercial business and security. Agence France-Presse reported that some groups, including some working on data centers, sales and marketing, are excluded. CNBC's source said some marketing, sales and engineering teams have opted out. Microsoft's memo does not identify which divisions are involved.

For HR leaders, the offer raises familiar capability questions: how voluntary programs at this scale affect retention of critical skills, how division-by-division participation shapes internal mobility, and how severance economics compare to involuntary reductions. Microsoft's Wednesday earnings report — and how many of the 60,000 eligible employees accept by December — will signal whether voluntary exits become a standing lever in the company's workforce planning.

By Olivia Hart