Microsoft Offers Buyouts to 60,000 Staff as AI Spending Soars
Microsoft is offering voluntary exit packages to approximately 60,000 employees, roughly 27% of its global workforce, as surging artificial intelligence infrastructure investments pressure operating expenses and free cash flow declines. Second-quarter free cash flow fell 23% year-over-year to $19.64 billion, underscoring the capital demands driving this workforce adjustment.
The restructuring aims to preserve financial flexibility to fund capital expenditures projected to hit $175 billion in 2026. While trimming labor costs could alleviate future expense ratios, severance payouts will impact short-term earnings. Because the company has not set a strict target headcount for departures, total financial savings remain contingent entirely on employee participation rates.
Eligible participants include staff on select teams in the United States, Canada, India, and Britain at the vice president level and below. Chief People Officer Amy Coleman noted in an internal memo that the voluntary exit offer is designed to provide greater flexibility and alternative pathways for employees. However, the program explicitly excludes several divisions, including specific engineering groups, sales, marketing, and data center operations.
This marks Microsoft‘s second voluntary exit initiative this year. In April, the firm extended early retirement options to roughly 7% of its U.S. workforce, yielding a 30% uptake among those eligible, according to CNBC data. Global headcount stood at 223,000 at the end of June, down from 228,000 at the close of 2025. Following the announcement, Microsoft shares rose 1.45% to $532.13.
Eligible employees must submit their decisions by early December, with departing staff scheduled to leave on December 31.
