Microsoft Offers Voluntary Buyouts to About 60,000 Employees in Four Countries

Microsoft is offering buyouts to about 60,000 employees, and the company is calling it a new tool, not a headcount target.

Chief People Officer Amy Coleman announced the Voluntary Exit Offer in a memo to staff today, Oct. 26. It covers employees at internal level 70 and below in participating teams in the U.S., Canada, the U.K. and India. Microsoft's annual filing put its workforce at 223,000 full-time employees as of June 30, down from 228,000 a year earlier. That figure predates the company's July layoffs.

What employees are being offered

The package is Microsoft's standard severance, according to the company. Under the U.S. severance terms used in this year's layoffs, workers receive at least 60 days of base pay and up to 39 weeks, depending on tenure and level. Employees at level 64 and below got one week of base pay per six months of service. Levels 65 to 67 got two weeks per six months.

The company says the offer also includes continued stock vesting, a fixed period of health coverage and career transition services. It does NOT include the extended healthcare that made the spring retirement program attractive.

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

Employees have until the first week of December to decide, and those who accept leave at the end of the year. A Microsoft spokesperson said there are no plans for another buyout at this time.

Which teams are in

Participation is team by team. Sources familiar with the matter told The Verge that staff in AI experiences, Copilot, CoreAI, Windows + Devices, Xbox, finance and human resources are eligible. Cloud + AI, MicrosoftAI, and corporate, external and legal affairs are partially participating. Marketing, commercial business, discovery and quantum, and security are not, those sources said.

Microsoft confirmed that sales organizations, some engineering groups and some corporate functions are excluded.

How it differs from the spring program

In April, Microsoft ran its first-ever voluntary retirement program. It was limited to U.S. employees at level 67 and below whose age plus years of service totaled at least 70. About 9,000 people were eligible, and roughly a third took it, in line with the company's expectations, according to a person familiar with the turnout.

This offer is far broader. Microsoft told GeekWire it expects a much smaller share to accept than the roughly 30% who took the retirement deal, because that group was made up of longtime employees more likely to leave. The company has not given a projection. At 60,000 eligible, even a single-digit take rate would mean thousands of departures.

The company's explanation

Microsoft rejects the idea that this signals a smaller footprint is the goal. A spokesperson described the offer as one of several ways the company is adjusting to changing business needs, not an indication it needs fewer employees.

Coleman's memo framed it as choice. "This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," she wrote. She also called the program experimental: "The Voluntary Exit Offer is new for us. We'll learn from it."

The financial backdrop is not in dispute. Microsoft has been spending heavily on data centers to serve AI demand, including cloud services for Anthropic and OpenAI. In the second quarter, Alphabet and Amazon both reported negative free cash flow, while Microsoft stayed positive. GeekWire reports the company is under pressure from Wall Street to hold down operating expenses as it spends tens of billions of dollars on AI infrastructure.

The layoff trail

The buyout comes after Microsoft cut 4,800 jobs in July, which The Verge reports fell mainly on Xbox and commercial sales. Fortune has reported that Xbox CEO Asha Sharma is planning further layoffs. Microsoft has not commented in the material tied to today's announcement, and the offer does not target commercial sales.

Buyouts remain unusual among the biggest tech companies, which have mostly used layoffs, tougher performance reviews and return-to-office mandates to thin their ranks, according to GeekWire.

From a business standpoint, a voluntary program is gentler than a layoff notice. Workers choose whether to go, and they leave with severance. It is not yet clear who will raise a hand. With no age, tenure or performance filter, the offer is available to anyone in a participating team, and Microsoft has not said whether managers can steer who stays or goes.

The next marker is early December, when the decision window closes. Microsoft will then have its first real read on how many of the 60,000 took the exit, and whether the Xbox cuts Fortune describes follow.