Microsoft offers buyouts to 60,000 workers as it looks to trim costs

Microsoft is offering buyouts to 60,000 employees — roughly a quarter of its global workforce — as the company looks to slash costs while investing heavily in artificial intelligence.

The tech giant based in Redmond, Wash., has offices throughout the world, including in California. Microsoft didn’t indicate how many California employees are eligible for the buyouts when reached for comment.

The move comes as other major tech companies including Meta, Amazon and Oracle lay off workers and ramp up investments in data centers and infrastructure to support AI-powered products.

In July, Microsoft announced it was laying off 4,800 employees. While the company acknowledged that AI is automating tasks, it said the roles being eliminated weren’t being replaced by AI. For the first time, the company also introduced a voluntary retirement program for certain workers.

Employees in certain teams in the U.S., the United Kingdom, Canada and India will be eligible for the buyout, according to the memo, which was made public Monday.

“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support. It also gives participating organizations another way to adapt their workforce to changing needs,” Amy Coleman, executive vice president and chief people officer, said in a memo.

The memo doesn’t say how many employees are eligible, but a Microsoft spokesperson confirmed reports that roughly 60,000 employees will be eligible.

Microsoft has roughly 223,000 workers globally. Some employees who work on data centers, sales and marketing aren’t eligible, Bloomberg reported.

Microsoft also owns social network LinkedIn, developer platform Github and gaming studios such as Xbox and Activision Blizzard. A Microsoft spokesperson confirmed those subsidiaries aren’t part of the voluntary buyout program.

The deadline for workers to respond varies by market, but the last day for those who accept a buyout is expected to be at the end of December. Microsoft hasn’t said if it will lay off workers if enough employees don’t accept buyouts.

“There is no one-size-fits-all approach for every team or every employee. These are a few of the ways we’re trying to meet different business needs while continuing to create opportunities for our own people to grow and contribute,” Coleman said in the memo.

The software maker competes with major rivals such as Google and Amazon for customers and has an AI-powered assistant called Copilot. Microsoft 365 Copilot has more than 30 million paid users, but adoption is much smaller than Google’s Gemini or OpenAI’s ChatGPT.

In July, Microsoft reported that revenue in the fiscal fourth quarter reached $90 billion and net income was $35.8 billion, beating analysts’ expectations. The company is scheduled to report its quarterly earnings on Wednesday.