Microsoft extends buyouts to 60,000 workers to cover AI infrastructure costs

Microsoft is offering buyouts to 60,000 employees, a figure that represents approximately 27% of its total workforce of 223,000. The company announced the voluntary exit offer on Monday for specific workers in the United States, Canada, India, and the United Kingdom. Eligibility is limited to staff at experience level 70 or below, which includes the vice president level.

The move aims to balance a massive spending increase on artificial intelligence infrastructure with capital efficiency. Microsoft has been ramping up data center construction to handle high AI computing demand for clients like Anthropic and OpenAI. Capital expenditures for the September quarter are projected to exceed $50 billion, up from $34.9 billion in the same period a year ago.

This financial strain has already prompted other personnel changes. In April, the company introduced a voluntary retirement program that was available to about 7% of U.S. employees. In July, Microsoft announced plans to lay off 4,800 workers. The new buyout initiative expands on those earlier efforts by targeting a higher tier of the organization.

Amy Coleman, Microsoft's executive vice president and chief people officer, addressed the change in a memo to employees. She described the offer as a way to create greater flexibility and allow staff to shape their next chapter. Coleman noted that the program builds on lessons learned from the voluntary retirement initiative earlier in the year.

The company is also shifting its business model to charge clients based on actual AI usage. It has deployed AI tools to programmers, sales teams, and supply chain workers, citing noticeable results. Management seeks to retain the right talent for new growth opportunities while ensuring the financial profile remains stable. Microsoft reported positive free cash flow of $19.64 billion in the second quarter, a 23% decrease from the previous year.

Some marketing, sales, and engineering teams have opted out of the new buyout, according to a person familiar with the matter. Employees must decide whether to accept the offer by early December. Those who participate are scheduled to leave the company on December 31. Unlike the previous retirement program, where more than 30% of eligible staff participated, Microsoft has not set a specific target for this round.

The company is scheduled to report third-quarter financial results on Wednesday.