Microsoft offers buyouts to 60,000 employees as AI spending climbs

Microsoft is offering voluntary buyouts to about 60,000 employees. That is more than a quarter of the software giant’s global workforce, announced on a Monday as the company tries to rein in costs.

The goal is to keep expenses in check while Microsoft funds a massive buildout of artificial intelligence.

Who gets the offer, and who doesn’t

The program was announced on October 26, 2026. It targets roughly 27% of a workforce that numbers about 223,000 people.

Eligibility is limited to employees at level 70 and below, Microsoft’s internal job grading system. The offer covers staff in the US, Canada, the UK and India.

A source familiar with the matter told Reuters which units are included. The source requested anonymity because the matter was private.

The eligible list reads like a tour of Microsoft’s consumer and corporate machinery:

• AI experiences
• Copilot
• Finance
• Human resources
• Xbox
• Windows + Devices

The excluded list is just as telling. Marketing, commercial business and security are off the table, according to the same source. Some data center functions are also excluded.

The terms of the deal

The offer was laid out in an internal memo from Chief People Officer Amy Coleman. Employees who take it get a standard severance package.

That package includes pay based on tenure and level and continued stock vesting. It also comes with limited healthcare coverage and career transition support.

The timeline is tight. Eligible employees must decide by early December. The exit date is set for December 31, 2026.

A year of shrinking headcount

This is not Microsoft’s first trim. The company has cut its workforce repeatedly through 2025 and 2026.

The most recent round came in July 2026, when Microsoft eliminated 4,800 roles. Earlier in 2026, it ran a separate voluntary retirement program.

That earlier program was much smaller. About 8,750 US employees were eligible, and participation came in at around 30%.

The new offer is roughly seven times larger in scope. It also reaches younger employees and three more countries, not just retirement-age US staff.

Following the money

The cost pressure has a clear source. Microsoft’s capital expenditures for 2026 are projected at $175 billion, with much of that aimed at AI infrastructure.

Voluntary buyouts are a softer tool than layoffs. Employees choose to leave, which tends to reduce legal risk and morale damage. The tradeoff is less control over who actually walks out the door.

Wall Street did not seem bothered. Microsoft shares rose 1% on the day of the announcement.

The timing is notable. The move landed just days before the company’s first-quarter earnings release, scheduled for later that same week.