Microsoft offers buyouts to about a quarter of its workforce

About 60,000 Microsoft employees can take a voluntary exit package that matches standard severance, the company told GeekWire.

Microsoft is offering buyouts to a broad slice of its staff. It calls the program a Voluntary Exit Offer.

Chief People Officer Amy Coleman announced it Monday in a memo to employees, which Microsoft posted on its official blog.

“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support,” Coleman wrote. “It also gives participating organizations another way to adapt their workforce to changing needs.”

Who is eligible

The offer is open to eligible employees in participating teams in Canada, India, the United Kingdom and the United States at level 70 and below, the memo says. It is time-limited and voluntary. It comes with financial support and career planning resources. “Some organizations are providing the Voluntary Exit Offer, and some are not,” Coleman wrote.

About 60,000 people are eligible, according to CNBC, which cited a person familiar with the matter. CNBC says that is about 27% of Microsoft’s 223,000 employees. Microsoft told GeekWire the same 60,000 figure, which GeekWire puts at about a quarter of the workforce.

Some marketing, sales and engineering teams chose not to take part, CNBC’s source said. Employees must decide in early December, and those who accept will leave Dec. 31, according to CNBC.

What’s in the package

The package is equal to Microsoft’s standard severance, the company told GeekWire. That includes base pay tied to tenure and level, continued stock vesting, healthcare for a fixed period and career transition services. It does not include the extended healthcare offered in the company’s spring retirement program, GeekWire reports.

There is no age or tenure requirement, and performance is not a factor, the company told GeekWire. Level 70 covers general managers and some employees with vice president titles, but not corporate vice presidents, GeekWire says.

Coleman wrote that the offer “builds on what we learned earlier this year through the Voluntary Retirement Program.” That program opened in April to about 7% of U.S. employees, CNBC says. More than 30% of those eligible took it, Microsoft said in July, according to CNBC. Microsoft also announced plans in July to lay off 4,800 employees, CNBC reports.

The AI link

CNBC frames the offer as part of Microsoft’s effort to balance a costly AI infrastructure build-out with capital efficiency. Microsoft has been spending heavily on data centers to supply cloud services to Anthropic, OpenAI and others, CNBC reports. Coleman’s memo does not mention AI.

Microsoft says the offer is not a sign it needs fewer employees, GeekWire reports. A spokesperson called it one of several ways the company is adjusting to changing business needs. The company also told GeekWire the offer does not replace layoffs.

Our read: A buyout is not a layoff. Employees choose whether to go, and Microsoft told GeekWire it expects a much smaller share to accept than the roughly 30% who took the retirement deal. So 60,000 is a ceiling on eligibility, not a count of departures. CNBC’s source says there is no target. Still, the pool is large. That is nearly seven times the roughly 8,750 U.S. employees who were eligible for the spring program, by GeekWire’s count. The terms are also thinner, matching standard severance. Microsoft’s headcount was already falling, to 223,000 on June 30 from 228,000 a year earlier, GeekWire says, citing company filings. That was before the July layoffs. The AI link comes from CNBC’s framing of rising data center costs, not from the memo. What is not yet known is the cost. Microsoft disclosed a $900 million charge for the retirement program, GeekWire reports. The size of any charge for this offer depends on how many people say yes.