Microsoft to offer buyouts to 60,000 workers in latest cost cut

Microsoft Corp. will offer buyouts to about 60,000 workers, part of the company’s efforts to trim costs and retool its workforce for the artificial intelligence era.

Personnel on select teams in the US, Canada, India and the UK at a vice president level and below will be eligible, said a Microsoft spokesperson. Certain pools of employees, including some focused on data centers, sales and marketing, aren’t eligible, the spokesperson said.

“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support,” Chief People Officer Amy Coleman said in a note to workers Monday. Workers will receive benefits similar to a standard severance package, the spokesperson said.

The world’s largest software maker has shed tens of thousands of workers in waves of layoffs in recent years. In July, it offered buyouts to retirement-age employees, and more than 30% of the roughly 8,750 eligible people took the offer. Microsoft expects far fewer personnel to accept the latest buyout proposal compared with the voluntary retirement program, the spokesperson said.

Microsoft’s headcount as of the end of June was 223,000. The figure has been largely flat since 2022, about the time Microsoft began spending heavily on AI and data centers — squeezing budgets and hiring elsewhere in the company.

Other companies have sought to shrink headcount as they redirect spending to AI infrastructure. Google offered voluntary buyouts in a number of units last year, CNBC reported. Meta Platforms Inc.’s headcount is down by more than 20,000 from a late 2022 peak. Both are among the biggest spenders on data center infrastructure.

The Microsoft spokesperson said the company wants employees who are engaged on the hard problems it’s trying to solve. That echoes other tech bosses, who’ve publicly made clear that continued employment means embracing a faster pace of work and change.

Elon Musk in 2022 famously gave Twitter employees the choice to be “extremely hardcore,” or take a severance payment. Earlier this year, Business Insider reported that a Google executive told employees in his organization that those who weren’t “all in” on AI could have a voluntary buyout package.

Workers deciding whether to take a buyout typically assess their savings and whether they’re at risk of layoffs later. Midcareer professionals also consider the job market and how long it might take them to find a new role, or whether the package gives them enough runway to make a pivot. Buyouts typically go to more senior, higher-cost staff, as with Microsoft’s round of early retirement offers, and offer more generous terms than a layoff.

In some cases, Microsoft will try to retain top talent if employees opt to take the buyout offer, the spokesperson said.

The buyouts give Microsoft units “another way to adapt their workforce to changing needs,” Coleman wrote in the memo.

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