Microsoft announces large-scale voluntary exit offer

Microsoft has announced a voluntary departure plan for approximately 60,000 employees in the United States, Canada, India, and the United Kingdom. This represents about 27% of its current global workforce and is the second such initiative in six months, following several rounds of layoffs in recent years.

Details of the exit program

The voluntary exit offer (VEO) is open to employees classified up to level 70 in the internal hierarchy, which includes certain senior managers but excludes top executives. Eligible employees have until the first week of December to decide whether to accept the offer, with those who accept set to leave the company on December 31. Compensation will be based on tenure and level, with temporary maintenance of certain benefits and professional support.

Impact across different divisions

The program affects multiple teams, including the Xbox, Windows + Devices, Copilot, and CoreAI divisions, as well as human resources and finance. However, data centers, sales teams, marketing, security, and some engineering activities are excluded. Unlike the early retirement program launched in April, which targeted approximately 8,750 American employees, this new initiative does not impose age or tenure requirements.

Recent layoffs and company comments

Microsoft has previously reduced its workforce, including 4,800 job cuts in July, with 1,600 immediately at Xbox. The gaming division had planned for a total of 3,200 job cuts for the fiscal year 2027. Further cuts followed in September, and earlier in the year, an initial early retirement program saw nearly a third of eligible employees accept the offer.

Company rationale and future outlook

According to Amy Coleman, Microsoft's head of human resources, the initiative aims to provide employees with greater flexibility to consider the next stage of their careers while allowing different divisions to adapt to evolving needs. The company emphasized that this initiative does not necessarily indicate a need for fewer employees, though it acknowledged the possibility of further layoffs depending on business evolution.

AI investments and operational costs

The announcement comes amid significant investments in artificial intelligence, with Microsoft planning to invest $175 billion in AI infrastructure this year. The company signed a deal worth "billions" of dollars with Mistral, a French AI company, to use its computing power in Europe. These investments are costly, with data centers, GPUs, and energy requirements increasingly weighing on Microsoft's expenses.