A hot potato: Microsoft is set to reduce headcount at the company as it spends an increasingly obscene amount of money on AI infrastructure. This time, rather than laying off workers, the Redmond firm is reportedly offering voluntary buyouts to employees – something Microsoft has never done in its 51-year history.
The buyout program will open to around 7% of Microsoft's US employees, according to CNBC, which cites a person familiar with the plans who can't be named.
The Redmond giant had around 228,000 employees globally and 125,000 in the US as of June 2025, which means up to 8,750 people could be offered a paid exit when the program begins in May.
The buyouts are being referred to as a one-time retirement program. It will be available to US workers at the senior director level and below whose years of employment and age add up to 70 or higher. Those with sales incentive plans cannot participate.
Companies are laying off employees at an accelerating rate, and it's nearly always as a result of AI – either automation replacing jobs or spending on the technology taking priority.
"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Microsoft's executive vice president and chief people officer Amy Coleman wrote in a memo.
Microsoft layoffs since 2023
| Date (announcement) | Reported head-count cut | Main business areas hit |
|---|---|---|
| 18 Jan 2023 | 10,000 | Windows & devices, Xbox, HoloLens, recruiting & marketing |
| 25 Jan 2024 | 1,900 | Activision Blizzard, Xbox, ZeniMax after the ABK deal closed |
| 3 – 4 Jun 2024 | ≈1,000 (internal est.) | Azure for Operators, HoloLens/mixed-reality, other "moon-shot" teams |
| 12 Sep 2024 | ≈650 | Xbox publishing & game-studio support teams |
| Jan – Feb 2025 | ≈2,000 | Company-wide "low-performer" cull (no severance in many cases) |
| 13 May 2025 | ≈6,000 (Microsoft says "< 3% of staff") | All geographies; focus on middle-management, LinkedIn |
| 2 Jun 2025 | 305 | Redmond, Washington HQ roles; additional WARN-notice layoffs following the May cuts |
| 2 Jul 2025 | ≈9,000 (Microsoft says "< 4% of staff") | Company-wide; Xbox, sales, management layers, and other divisions |
| 23 Apr 2026 (opens May) | Up to ≈8,750 offered voluntary exit | US employees at senior director level and below whose age plus tenure equals 70 or higher; certain sales staff excluded |
Microsoft has let go of thousands of workers over the last year as it ramps up spending on all things AI-related.
In May 2025, the company said it was laying off 6,000 workers, around 3% of its global workforce. The move came as Microsoft designated $80 billion in capital spending for the fiscal year, with most of it aimed at expanding data centers for its artificial intelligence services.
Worse news came in July when another 9,000 cuts were announced. These job eliminations came as Microsoft thrived financially. CEO Satya Nadella explained this contrast as the "enigma of success in an industry that has no franchise value," which no doubt made those who lost their jobs feel better.
After 15,000 people had been made unemployed, Nadella's compensation increased 22% to $96.5 million in October, further illustrating this enigma of Big Tech.
In Q2 2026, Microsoft spent $37.5 billion in capital expenditures, most of it going toward data center projects.
It appears spending on AI, rather than being replaced by technology, is what's costing Microsoft workers their jobs. Meta employees are facing the same scenario: the social media giant is cutting 8,000 of its staff to bankroll its AI ambitions.
Microsoft offers voluntary buyouts to thousands of US workers as AI spending takes priority
