With its stock near record highs, the tech giant is looking to cut costs to help fund the artificial intelligence race.
What You Need to Know
- 60,000 Eligible, Fewer Than 3,000 Expected to Leave? Microsoft is offering voluntary buyouts to roughly 60,000 employees, but estimates that only 3% to 5% of those eligible will accept the offer, according to The Seattle Times.
- The AI Price Tag: The company expects $175 billion in capital expenditures in 2026. The tech industry is projected to invest more than $700 billion in data centers — and investors are questioning whether the returns will justify the spending.
- How Much Employees Get and When They Leave: Severance pay can reach 39 weeks of base pay for employees at level 67 or below. Unlike the April program, the new offer does not include up to five years of health coverage. Employees who accept the offer must leave the company by December 31, 2026.
Microsoft announced a Voluntary Exit Offer on Monday (Oct. 26) that could cover about 60,000 employees, or roughly 27% of its global workforce.
That figure represents the pool of eligible employees, not the number expected to accept the offer. According to The Seattle Times, Microsoft estimates that only 3% to 5% of eligible employees will accept — fewer than 3,000 people. The offer comes as the company increases its spending on artificial intelligence (AI).
Who Is Eligible
- Eligible teams: Employees on teams involved in AI projects, Copilot, finance, human resources, Xbox, and Windows + Devices.
- Excluded teams: Marketing, commercial business, security, some sales teams, and employees dedicated to data centers, according to Reuters.
- Countries: The United States, Canada, India, and the United Kingdom.
- Job level: Level 70 or below. According to CNBC, Level 70 corresponds to vice president. The offer covers employees at that level and below.
- Other criteria: There are no general requirements related to age, length of service, or performance.
- Notification: Eligible employees receive an email from Microsoft.
Deadline and Severance
- Decision deadline: The first week of December, according to Business Insider.
- Departure date: December 31, 2026, for employees who accept the offer.
According to individual offers reviewed by Business Insider in the United States, severance amounts vary by job level and length of service.
- Levels 64 and below: One week of base pay for every six months of service.
- Levels 65 to 67: Two weeks of base pay for every six months of service.
- Level 68: A standard package equivalent to 12 months of pay.
- Benefits: Continued stock vesting, health coverage for a specified period, and career transition services, according to GeekWire.
Standard severance can reach 39 weeks of base pay for employees at Level 67 and below. Terms vary by individual offer.
What Microsoft Says
Chief People Officer Amy Coleman said the offer gives employees who are considering leaving the company “a new option to make that transition now with support.”
The offer is voluntary and time-limited. According to Microsoft, the goal is to allow employees to leave with financial security and support as they plan their next career move.
Stock Is Up, but Cost-Cutting Continues
Even after its shares hit an all-time high in October, Microsoft is still looking to rein in spending. Its shares rose about 1% on Monday (Oct. 26) and were up roughly 10% for the year, according to Reuters.
Why It Matters
Microsoft and other Big Tech companies are investing hundreds of billions of dollars in AI infrastructure. Investors, however, are questioning whether the returns will justify the spending.
- $175 billion: Microsoft’s projected capital expenditures for 2026, largely associated with expanding its AI infrastructure, according to Reuters.
- More than $700 billion: Expected investment by tech companies in data centers in 2026, according to the Associated Press.
- 223,000 employees: Microsoft’s full-time headcount as of June 30, 2026, down from 228,000 on June 30, 2025, according to the company’s annual report. That represents a reduction of about 5,000 employees.
The roughly 60,000 employees potentially eligible for the voluntary exit offer represent about 27% of Microsoft’s 223,000 employees reported in June 2026. That percentage reflects the program’s potential reach, not the number of employees expected to accept.
Recent History
In April, about 30% of eligible employees accepted Microsoft’s voluntary retirement program, which offered up to five years of health coverage, according to GeekWire. The October offer does not include that extended benefit.
Quarterly Earnings
Microsoft reported its fiscal first-quarter 2027 results on Wednesday (Oct. 28), covering the period from July through September 2026. Revenue reached $92.3 billion, up 19% year over year, according to the company’s official earnings report.
Sources & References
• Microsoft Blog: Voluntary Exit Offer Announcement
• CPA Practice Advisor: Voluntary Buyout Coverage
• Reuters: Microsoft Buyout Report
• CNBC: Voluntary Buyouts Analysis
• Business Insider: Internal Memo & Details
• Associated Press: Tech Spending & AI Impact
• Microsoft Investor Relations: Annual Report 2026
• Microsoft Investor Relations: Earnings Release
• GeekWire: Employee Insights on the Buyout