Microsoft Opens Exit Doors To 60,000 Employees

Microsoft opened a voluntary exit path to tens of thousands of workers Monday as its AI build-out drives up spending.

The offer targets employees in the United States, Canada, India and the United Kingdom at experience level 70 or below. About 60,000 people qualify, roughly 27% of Microsoft's 223,000-person workforce, according to a person familiar with the matter. Marketing, sales and engineering teams have opted out of the program, the person said. Workers must decide by early December and depart on Dec. 31. Microsoft has not set a participation target this time.

Spending on data centers is the pressure point. Capital expenditures for the September quarter were projected in July to top $50 billion, against $34.9 billion for capital spending and finance leases in the same quarter a year earlier. Microsoft supplies cloud services to Anthropic, OpenAI and other companies. Free cash flow came to $19.64 billion in the second quarter, down 23% year over year, while Alphabet and Amazon both posted negative free cash flow for the period.

This is Microsoft's third staffing move of the year. In April it rolled out a voluntary retirement program to about 7% of U.S. employees, and in July it announced layoffs of 4,800 workers. More than 30% of those eligible for the April program took it. The April offer reached senior director level 67 and below; the current offer extends to vice president level. "This builds on what we learned earlier this year through the Voluntary Retirement Program," Amy Coleman, Microsoft's executive vice president and chief people officer, wrote to staff.

Microsoft has been shifting how it charges clients, billing for AI usage rather than fixed seats, and putting AI tools in the hands of programmers, sellers and supply chain workers. The company reports third-quarter results Wednesday.