Microsoft expects as few as 3% to 5% to accept

Microsoft on Monday offered voluntary exit packages to about 60,000 employees, roughly a quarter of its global workforce, but a company spokesperson said it expected as few as 3% to 5% of them to accept.

The offer covers staff at vice-president level and below in selected teams across four countries: the United States, the United Kingdom, Canada and India. Eligible employees have until early December to decide, with deadlines varying by country. Those who accept are expected to leave by the end of December.

The program is the latest step in a drive to shrink Microsoft's corporate workforce that began in May 2025. The offer lets Microsoft cut labor costs and reshape its staff without immediate mass layoffs while it spends heavily on artificial intelligence (AI).

Amy Coleman, Microsoft's executive vice-president and chief people officer, announced the offer in a memo to staff that was also posted on the company's website. "This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," she wrote.

Chief Financial Officer Amy Hood said in July that Microsoft expected to spend $175 billion (£131 billion) in 2026 on AI infrastructure such as data centers. The company's latest results, for the three months to the end of June, showed revenue of $90 billion (£67.4 billion) and net income of $35.8 billion (£26.8 billion), beating analysts' expectations.

Microsoft said the offer is not a layoff of 60,000 people. It also said it does not class the packages as buyouts, because no one is being given an incentive to leave. The terms are similar to Microsoft's standard severance and include financial support and career-planning help.

The packages vary by location, and some employees will also be offered extended health coverage and stock, Microsoft said.

The spokesperson said the take-up estimate, which would mean fewer than 3,000 departures, was based on similar offers at other companies. Microsoft said it has no target number.

Who is eligible, and why only some teams?

"Some organizations are providing the Voluntary Exit Offer, and some are not," Coleman wrote. "Participation varies based on each business’s priorities, customer commitments and workforce needs."

A screenshot of an internal memo seen by The Seattle Times listed gaming, Windows, human resources, finance and Copilot, the company's AI assistant, as fully participating. AI, legal and cloud teams were listed as partly participating, and marketing, commercial business and security teams as not taking part.

Microsoft has said staff working on data centers and in sales and marketing are among those excluded. But a Microsoft spokesperson told the Los Angeles Times that subsidiaries including the gaming businesses Xbox and Activision Blizzard, as well as LinkedIn and GitHub, are not part of the program, leaving it unclear whether gaming staff are covered.

Microsoft employed about 223,000 people at the end of June, including some 121,000 in the United States. The Daily Mail reported that the company's roughly 6,000 UK staff are among those in line for the offer.

How did Microsoft get here?

Microsoft's push to cut its workforce began with rounds of layoffs that eliminated about 15,000 jobs in 2025, before it turned to voluntary programs. Leadership took note of a souring culture after those cuts, The Seattle Times reported, as employees felt blindsided while the company was bringing in more cash than ever.

In April, Microsoft offered early retirement to U.S. employees whose age plus years at the company added up to more than 70. About 8,750 were eligible and roughly 30% accepted. Coleman wrote that the new offer builds on that program, and Microsoft said other staff had told it they would have taken the earlier deal had they qualified.

The Seattle Times reported that the new packages are not sweetened as the retirement deals were, and that the much wider pool lowers the chance of reaching staff who were already unsure about staying.

In July, Microsoft said it was cutting about 4,800 jobs, or roughly 2% of its staff worldwide, many of them in its Xbox video-game business.

Other technology companies are also shrinking: Meta announced plans in April to cut about 8,000 jobs, and Oracle cut 21,000 in June.

What each side argues

The disagreement turns on motive and on evidence: whether the cuts mainly reshape Microsoft for AI or mainly protect profits, and whether AI has yet made companies productive enough to justify smaller teams.

Microsoft has presented the offer as optional and supported. "It also gives participating organizations another way to adapt their workforce to changing needs," Coleman wrote. The company said the reference to changing needs was not code for AI.

Microsoft said it is not replacing workers with AI, though it has acknowledged that AI is automating some tasks. It said its cuts are meant to make the company flatter and more nimble, with fewer management layers and more accountability for each worker, and to shed outdated roles and teams as AI changes its business.

The company said earlier this year that it had redeployed about 4,000 employees who received layoff notices in 2025. Coleman wrote that Microsoft would keep helping staff build new skills and find other roles inside the company where it makes sense.

"We can call it efficiency or whatever you want, but ultimately, this comes down to the company's ability to squeeze out more profit and keep shareholders happy," said Kevin Thompson, chief executive of 9i Capital Group.

Bryan Driscoll, an HR consultant, said Microsoft was making a multibillion-dollar bet on AI while inviting a quarter of its staff to leave. "Workers helped build and grow one of the most valuable companies in the world and now they're being treated like an expense standing in the way of the next big investment," he said.

Whether AI-linked job cuts have yet made companies more efficient is unclear, The Guardian reported. It cited a National Bureau of Economic Research working paper in which 90% of 9,000 senior executives surveyed worldwide said AI had not yet raised productivity at their companies.

What happens next?

Microsoft reports results on Wednesday, 28 October, for July to September, the first quarter of its 2027 financial year. Analysts expect revenue of almost $91 billion (£68.2 billion).

The company may also estimate the cost of the exit offer, as Hood did before the retirement program, The Seattle Times reported. Microsoft took a $900 million (£674 million) charge for that earlier program.

It is not yet known how many employees will accept. Microsoft has not said whether it would lay off workers if too few take the offer.