Microsoft Offers Buyouts to 60,000 Employees

Microsoft said Monday it is offering voluntary buyouts to about 27% of its staff, as the company aims to reduce expenses amid its investments in developing and running AI. The buyout offers represent one of the largest potential staff reductions among large tech firms in recent history, and comes as Microsoft plans additional layoffs this year, primarily in its Xbox unit.

Around 60,000 of the company’s roughly 223,000 employees will be eligible for the buyouts, a spokesperson said, though staff in its sales organization are excluded from the program. Employees who accept the buyouts will receive severance pay depending on their seniority and tenure, Microsoft said. The move comes after The Information reported this month that Microsoft’s cloud president asked leaders to look more than 20% in potential cost cuts.

The buyout program comes as Microsoft capital spending on AI data centers has impacted its free cash flows, and the company predicts its headcount will shrink; CFO Amy Hood said in April that its headcount slightly declined from the same period a year earlier and is expected to decline slightly in the year ahead. Microsoft previously offered voluntary retirement buyouts to 9,000 employees earlier this year, roughly one-third of whom accepted the offer; it has separately laid off several thousand employees this year after laying off around 15,000 the year prior.