Microsoft said Monday it is offering voluntary buyouts to a large group of employees. The company is trying to balance heavy spending on artificial intelligence with keeping its finances in good shape.
The new voluntary exit offer covers certain workers in the U.S., Canada, India and the United Kingdom. It applies to employees at experience level 70 or below.
About 60,000 people are eligible, according to a person familiar with the matter. That is roughly 27% of Microsoft’s total workforce of 223,000 people.
Who Can Take the Microsoft Buyout
Not every team is taking part. Some marketing, sales and engineering teams have chosen not to participate, the person said.
Employees must decide whether to accept the offer in early December. Those who take it will leave the company on Dec. 31.
The person said Microsoft does not have a target number of departures in mind this time.
Amy Coleman, Microsoft’s executive vice president and chief people officer, explained the program in a memo to staff. “The Voluntary Exit Offer reflects an important part of how we’re evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter,” she wrote.
She added that the plan “builds on what we learned earlier this year through the Voluntary Retirement Program.”
In April, Microsoft announced its first-ever voluntary retirement program. About 7% of U.S. employees were eligible for that offer.
More than 30% of eligible workers took the retirement deal, Microsoft said in July. That program was open to employees up to the senior director level of 67, while the new buyout reaches up to the vice president level.
In July, Microsoft also announced plans to lay off 4,800 employees.
AI Spending Weighs on Finances
Microsoft has been spending heavily on data centers to meet demand for AI computing. It supplies cloud services to Anthropic, OpenAI and many other companies.
The company said in July that capital expenditures for the September quarter should top $50 billion. In the same quarter a year earlier, capital spending and finance leases totaled $34.9 billion.
Microsoft is also changing how it makes money. It is increasingly charging customers based on how much AI they actually use.
The company has given AI tools to its programmers, sellers and supply chain workers and has said it saw clear results. At the same time, the 51-year-old maker of Windows and Office wants to keep the right talent for its main growth areas.
In the second quarter, cloud rivals Alphabet and Amazon both reported negative free cash flow. Microsoft reported $19.64 billion in positive free cash flow for the period, down 23% from a year earlier.
Microsoft is scheduled to report its quarterly results on Wednesday.
