A new voluntary buyout at Microsoft could reach 60,000 people — about 27% of the company's worldwide headcount — as the tech giant shifts more spending toward AI infrastructure.
Here's what to know
According to CNBC, the offer applies to Microsoft employees in the United States, Canada, India, and the United Kingdom at experience level 70 or below.
Citing a person familiar with the matter, the outlet said about 60,000 of Microsoft's 223,000 employees can participate. That shows the company is trying to control labor costs while pursuing AI expansion.
Microsoft has been spending more on data centers to handle AI's computing intensity and to deliver cloud capacity to customers such as Anthropic and OpenAI, per CNBC.
The company said capital spending for the September quarter should top $50 billion, up sharply from $34.9 billion in capital expenditures and finance leases in the same quarter a year earlier.
Those costs have influenced Microsoft's staffing choices. It introduced a voluntary retirement program for certain U.S. employees, and it announced plans to cut 4,800 jobs, CNBC noted.
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The latest offer suggests Microsoft is funding part of its costly AI buildout through job turnover.
More background
In the second quarter, the company posted positive free cash flow of $19.6 billion, though it was down 23% from a year earlier. By comparison, cloud competitors Alphabet and Amazon reported negative free cash flow during the same period, CNBC reported.
Microsoft is also navigating a shift in how it does business. The 51-year-old company behind Windows and Office is increasingly trying to charge customers based on how much AI they use.
It is also reworking how it expects to make money from AI, not just spending more on the technology, per CNBC.
The highly profitable company is asking employees to shoulder uncertainty as it pursues its next major growth engine.
Microsoft has given AI tools to programmers, sales staff, and supply chain workers and said it has seen noticeable results as AI adoption rapidly changes jobs inside the company.
What's being done?
CNBC reported that workers who opt in are slated to depart Dec. 31.
Microsoft is not using the buyout in certain marketing, sales, and engineering teams, suggesting it considers those parts of the business especially important even as it makes cuts elsewhere.
Microsoft is also carrying forward its earlier retirement effort. The company said over 30% of eligible workers opted in to that program, according to CNBC.
The new initiative reaches higher up the corporate structure, extending to the vice president level, and Microsoft has no participation goal.
"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," Amy Coleman, Microsoft's executive vice president and chief people officer, wrote in a memo to employees. "This builds on what we learned earlier this year through the Voluntary Retirement Program."
Where can I learn more?
Microsoft's move reflects a pattern in which companies are reshaping their workforces through buyouts, layoffs, and AI investment.
• Disney kept cutting costs by offering voluntary early retirement to longtime executives.
• Flock Safety offered buyouts as cities dropped its camera systems and revenue pressure grew.
• In New York, regulators said 1,300 Amazon drivers lost work without required notice.
• At McClatchy, 90 layoffs left local newsrooms warning of large reporting gaps.
• Inside Microsoft, one employee spent $28,000 on AI tools in just 28 days.
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