REDMOND, Washington / RankWire.AI / – Microsoft is offering a voluntary exit package to about 27% of its workforce as it seeks to fund a costly AI infrastructure expansion while protecting capital efficiency. The offer, announced on Monday, applies to certain employees in the United States, Canada, India and the United Kingdom at experience level 70 or below. Around 60,000 workers are eligible, a person familiar with the matter said. Microsoft employs 223,000 people in total.
In a memo to staff, chief people officer Amy Coleman said, “The Voluntary Exit Offer reflects an important part of how we’re evolving our approach to change.” She said it aims to create greater flexibility and, where possible, more ways for employees to shape their next chapter. Coleman added that the programme builds on what Microsoft learned earlier this year through its Voluntary Retirement Program.
Eligible employees must decide in early December, and those who accept will leave the company on December 31, according to the person. Some marketing, sales and engineering teams have opted out of the buyout. Unlike the earlier programme, the new offer extends up to the vice president level. Microsoft has not set a target for how many employees should take it.
Buyouts follow retirement offer and layoffs
Microsoft introduced its first voluntary retirement program in April, with around 7% of US employees eligible. It was limited to staff at the senior director level of 67 and below whose age and years of service totalled at least 70. More than 30% of those eligible accepted, the company said in July. In the same month, Microsoft announced plans to cut 4,800 jobs.
The company has been increasing investment in data centres to meet demand for AI computing from customers such as Anthropic and OpenAI. Microsoft said in July that capital expenditures for the September quarter would top $50 billion. That compares with $34.9 billion in capital spending and finance leases a year earlier. The heavy spending has put pressure on the company’s finances.
Shift to usage-based AI pricing
Microsoft is moving towards charging customers according to how much AI they actually use. It has equipped programmers, sales staff and supply chain workers with AI tools and reported noticeable results. The company is also developing in-house AI chips, including the Maia 200 accelerator for its Azure data centres. Microsoft wants to ensure it has the right talent for its most compelling growth opportunities.
Microsoft reported $19.64 billion in positive free cash flow in the April-June quarter, down 23% year on year. Cloud rivals Alphabet and Amazon both posted negative free cash flow in the same period. The 51-year-old maker of Windows and Office aims to carry out its transformation without weakening its financial profile. It will report fiscal first-quarter results on Wednesday.