Microsoft extends buyouts to 60,000 workers as AI spending rises

Microsoft announced Monday that it is offering voluntary buyout packages to approximately 60,000 employees. The move aims to balance the company's heavy investment in artificial intelligence infrastructure with a focus on capital efficiency.

The offer is available to certain workers in the United States, Canada, India, and the United Kingdom. Eligibility extends to those at experience level 70 or below. This group represents about 27% of Microsoft's total workforce of 223,000 people, according to a person familiar with the internal matter.

The company has increased spending on data centers to meet demand for AI computing power, providing cloud services to firms such as Anthropic and OpenAI. Capital expenditures for the September quarter are expected to exceed $50 billion, a rise from $34.9 billion in the same period last year. These costs have pressured Microsoft's finances, leading to a first-ever voluntary retirement program in April and the announcement of 4,800 layoffs in July.

Amy Coleman, the company's executive vice president and chief people officer, told employees in a memo that the new offer creates greater flexibility. She noted that the initiative builds on lessons learned from the earlier retirement program.

Microsoft is shifting its business model to charge clients based on AI usage. The company has equipped programmers, sales teams, and supply chain staff with AI tools to improve performance. The goal is to secure the right talent for new growth areas while maintaining a strong financial profile. In the second quarter, Microsoft reported $19.64 billion in positive free cash flow, a 23% decline from the previous year, while rivals Alphabet and Amazon reported negative free cash flow.

Some marketing, sales, and engineering teams have opted out of the new buyout, the source said. Employees must decide whether to accept the offer by early December. Those who participate will leave the company on December 31. The new program reaches employees at the vice president level, higher than the senior director level cap of the previous retirement plan. Over 30% of eligible staff joined the earlier program. Microsoft does not have a specific participation target for this round.

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