Microsoft Offers Voluntary Buyouts To 60,000 Employees Across Four Countries To Save Costs Amid AI Infrastructure Spending

Microsoft has introduced a voluntary exit offer for employees in the US, Canada, India and the UK as it looks to manage costs while expanding its artificial intelligence (AI) infrastructure. Around 60,000 employees could qualify for the programme, according to a person familiar with the matter.

The offer is open to employees at experience level 70 or below and covers roughly 27% of Microsoft’s global workforce of 223,000. The company has not set a target for the number of employees it expects to leave under the scheme.

Employees will have until early December to decide whether to accept the offer. Those who opt in are expected to leave the company on 31 December.

AI Infrastructure Spending Puts Cost Efficiency In Focus

Microsoft has been investing heavily in data centres to meet growing demand for AI computing and cloud services. Its customers include Anthropic, OpenAI and several other companies developing and deploying AI models.

In July, Microsoft said capital expenditure for the September quarter would exceed $50 billion. Capital spending and finance leases stood at $34.9 billion in the corresponding quarter a year earlier.

The spending comes as Microsoft works to maintain its financial position while expanding its AI business. In the second quarter, the company reported positive free cash flow of $19.64 billion, down 23% from a year earlier. Alphabet and Amazon, its cloud rivals, reported negative free cash flow for the same period.

Microsoft is also changing how it sells AI services, with a growing focus on charging customers based on actual usage. It has rolled out AI tools to programmers, sales teams and supply chain workers as part of its internal push to improve productivity.

New Buyout Offer Follows Earlier Workforce Changes

The latest programme follows other workforce measures introduced this year. In April, Microsoft announced its first voluntary retirement programme, which was open to around 7% of its US workforce. The company said in July that more than 30% of eligible employees had taken up that offer.

Microsoft also announced plans in July to cut 4,800 jobs. The new voluntary exit offer covers a wider group of employees, extending eligibility up to the vice-president level, according to the person familiar with the plan.

Amy Coleman, Microsoft’s executive vice-president and chief people officer, said in an employee memo that the offer would give workers greater flexibility and more options in deciding their next steps. She added that the programme builds on the company’s experience with the earlier voluntary retirement scheme.

Some marketing, sales and engineering teams have opted out of the new offer, according to the person familiar with the matter. Microsoft has not disclosed how many employees it expects to accept the buyout.

The company is scheduled to report its third-quarter results on Wednesday, with investors likely to watch its AI-related spending, cloud business and financial performance closely.

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