Microsoft extends buyout window to 60,000 staff below VP level

Microsoft is offering voluntary exit packages to approximately 60,000 employees, a move that affects roughly 27% of its global workforce.

The company began restructuring its spending in April with a voluntary retirement program for U.S. staff. That initial effort reached about 7% of American employees. In July, Microsoft followed up by laying off 4,800 workers. The new offer expands eligibility to experience level 70, which includes the vice president tier. This change widens the pool beyond the senior director level that qualified for the earlier retirement option.

The buyout targets workers in the United States, Canada, India, and the United Kingdom. Microsoft stated in July that capital expenditures for the September quarter would exceed $50 billion. This figure represents a sharp increase from the $34.9 billion spent in the same period the previous year. The spending surge supports a massive build-out of data centers needed to handle high demand for artificial intelligence computing. The company provides these cloud services to clients including Anthropic and OpenAI.

Amy Coleman, Microsoft's executive vice president and chief people officer, addressed the change in a memo to staff. She described the offer as a way to create greater flexibility for employees. Coleman noted that the initiative builds on lessons learned from the voluntary retirement program earlier in the year. The company is shifting its business model to charge clients based on actual AI usage. It has also deployed AI tools among programmers and sales teams to improve efficiency.

Microsoft reported $19.64 billion in positive free cash flow during the second quarter. That amount fell 23% from the prior year, though it remained positive while rivals Alphabet and Amazon reported negative cash flow for the same period. The company aims to complete this transition without weakening its financial standing. A source familiar with the matter said the firm does not have a specific headcount target for this round of exits. More than 30% of eligible employees joined the previous voluntary retirement program.

Some marketing, sales, and engineering teams have opted out of the new buyout. Employees must make a decision on whether to accept the offer in early December. Those who participate will depart the company on December 31. Microsoft is scheduled to report its third-quarter financial results on Wednesday.