Microsoft opens buyout window for 60,000 staff as AI costs mount

Microsoft announced on Monday that it is extending voluntary buyout offers to approximately 60,000 employees. The move applies to staff in the U.S., Canada, India, and the U.K. who hold an experience level of 70 or below. This group represents about 27% of the company's total workforce of 223,000 people.

The software giant is trying to balance its massive spending on artificial intelligence infrastructure with a need for capital efficiency. Microsoft has increased its data center spending to meet high computing demand for cloud services provided to clients like Anthropic and OpenAI. The company stated in July that capital expenditures for the September quarter would exceed $50 billion, up from $34.9 billion in the same period a year earlier.

This financial pressure follows a series of personnel adjustments earlier in the year. In April, Microsoft launched a voluntary retirement program that made about 7% of U.S. employees eligible. By July, the company announced plans to lay off 4,800 staff members. More than 30% of those eligible for the earlier retirement program accepted the offer, according to company data released in July.

Amy Coleman, Microsoft's executive vice president and chief people officer, addressed the changes in a memo to employees. She wrote that the new offer reflects how the company is evolving its approach to change. Coleman noted that the initiative creates greater flexibility and allows employees to shape their next chapter, building on lessons learned from the earlier retirement program.

The new buyout window extends further up the corporate ladder than the previous retirement option, which was limited to those at the senior director level of 67 and below. The current offer reaches the vice president level. A person familiar with the matter said Microsoft has not set a specific target for how many employees will participate this time. Some marketing, sales, and engineering teams have already decided not to join the program.

Employees must decide whether to accept the offer in early December. Those who participate will leave the company on Dec. 31. Microsoft reported positive free cash flow of $19.64 billion in the second quarter, a 23% decrease from the previous year. The company is scheduled to report its third-quarter financial results on Wednesday.