Microsoft moved to contain costs and fund its expanding artificial intelligence infrastructure by offering voluntary exit packages to about 60,000 employees, roughly a quarter of its global workforce. The program applies to eligible staff in the United States, Canada, the United Kingdom and India at experience level 70 or below, according to an internal memo from Chief People Officer Amy Coleman.
The stock reaction became the story on Monday. Shares initially dipped to $521.69 as headlines framed the news as mass layoffs, then reversed and climbed to $531.60 by late afternoon, a gain of 1.35% on the session. Investors ultimately treated the buyout program as a potential margin-expansion lever rather than a sign of distress. Microsoft finished with a market value around $3.95 trillion.
The offer is time-limited and voluntary. Eligible employees must decide by the first week of December, with participating staff expected to leave on December 31. The package matches standard severance, including base pay scaled to tenure and level, continued stock vesting, healthcare for a fixed period and career transition services. It does not include the extended healthcare that made Microsoft's earlier retirement program more attractive.
Microsoft expects a much smaller take-up rate than the roughly 30% acceptance it saw in its spring voluntary retirement program, which reached about 8,750 US employees. The company has not set a target for how many employees will accept the new offer. A company spokesperson said the program does not signal a need for fewer employees and is not a replacement for layoffs, which remain possible.
The buyout offer comes as Microsoft commits enormous sums to data centers, advanced chips and other infrastructure needed to support AI services. The company has forecast $175 billion in capital expenditure for the 2026 calendar year and said September-quarter capital spending would exceed $50 billion, compared with $34.9 billion in capital spending and finance leases a year earlier. Microsoft reports fiscal first-quarter results after the close on October 28, with analysts looking for $4.71 in adjusted earnings per share on $90.62 billion in revenue.
The wider workforce restructuring extends beyond Microsoft. American Express recently said it would cut 5% of its global workforce, Barclays announced about 5,000 job eliminations, Meta disclosed plans to cut about 8,000 roles, and Oracle cut roughly 21,000 jobs in June. Microsoft itself cut about 4,800 roles in July and hundreds more in September, while headcount stood at 223,000 at the end of June, down 2.19% over twelve months.
Oppenheimer raised its Microsoft price target to $625 from $570, and BNP Paribas published a bullish note ahead of earnings. The combination of AI spending scrutiny, possible severance charges and a quarterly capital expenditure figure near $50 billion is expected to frame Microsoft's upcoming report.
