Microsoft said Monday it is offering buyouts to a wide range of employees as it strives to balance costly building AI infrastructure with capital efficiency.
The software company announced a new voluntary separation offer for certain workers in the United States, Canada, India and the United Kingdom at an experience level of 70 or less.
About 60,000 people are eligible, according to a person familiar with the matter, who requested anonymity during an internal debate. This effort concerns approximately 27% of Microsoft’s total workforce, or 223,000 people.
Microsoft has increased its spending on data centers to meet high computing demand for AI, providing cloud services to Anthropic, OpenAI and many other companies. This put a strain on Microsoft’s finances. In April, it announced a first-ever voluntary retirement program for which about 7% of U.S. employees were eligible. Then, in July, Microsoft announced plans to lay off 4,800 employees.
“The voluntary separation offer reflects an important part of how we are evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter,” Amy Coleman, Microsoft executive vice president and chief human resources officer, wrote in a memo to employees. “This builds on what we learned earlier this year through the voluntary retirement program.”
In the second quarter, Microsoft’s cloud competitors Alphabet and Amazon both reported negative free cash flow, but Microsoft posted positive free cash flow of $19.64 billion for the period, down 23% year-over-year.
Some marketing, sales and technical teams have decided not to participate in the new acquisition, the source said. Employees must decide whether to accept the offer in December, and participants will leave on Dec. 31, the person added.
More than 30% of those who could join the voluntary retirement program took it, Microsoft said in July. But that was open to senior director levels and below, while the new initiative goes higher, up to the vice president level, the person briefed on the new plan said. The person said Microsoft didn’t have a goal in mind this time.
On Wednesday, Microsoft releases its third quarter results.
WATCH: Amazon and Microsoft profits are key to assessing AI ROI (CIO)
Gn headline
