Microsoft Offers Buyouts to 60,000 Employees to Fund AI
Microsoft is offering voluntary buyouts to approximately 60,000 employees across four countries to reduce costs and prioritize massive investments in AI infrastructure.
Microsoft Corporation announced a Voluntary Exit Offer (VEO) on October 26, 2026, providing buyouts to approximately 60,000 eligible employees. This represents roughly 27% of the company's 223,000-person global workforce. The program targets staff at internal level 70 (vice president level) and below in the United States, Canada, India, and the United Kingdom.
Chief People Officer Amy Coleman stated the initiative allows employees to transition out of the company with support while helping the organization adapt to changing needs. Participating divisions include Xbox, Windows + Devices, Copilot, finance, and human resources, while security, marketing, and quantum computing teams are excluded. Severance packages vary by seniority, with some employees receiving one month of base salary per year of service, alongside health insurance and continued stock vesting. Eligible staff have until early December to decide, with departures scheduled for December 31.
The move follows a July layoff of 4,800 employees and a smaller voluntary retirement program in April. The company is reducing payroll costs to offset immense capital expenditures on AI infrastructure and data centers, with some projections reaching $175 billion for 2026. While Microsoft frames the VEO as a structural optimization, analyst Sean Campbell suggested it could signal the company is falling behind in the AI race.
Simultaneously, the company is managing a conflict with the Trump administration, which suspended Microsoft from the Permanent Labor Certification program on October 8. President Brad Smith rejected claims that the company replaced American workers with H-1B visa holders, asserting that the vast majority of its U.S. employees are Americans.
