Microsoft Offers Buyouts to 60,000 Staff as AI Reshapes Its Workforce

Microsoft is offering voluntary exit packages to about 60,000 employees across the US, UK, Canada, and India, a move designed to trim operating costs so the company can keep funding its AI infrastructure. The offer, which is open until December, marks the first time the company has extended such a program to this many workers. It builds on an earlier retirement offer made this year to roughly 9,000 employees.

The company's headcount stood at about 223,000 as of June 30, down from 228,000 in 2025. That marks the first year-over-year decline in a decade. Microsoft laid off 4,800 people in July, hitting Xbox and commercial sales teams hardest, and cut 4 percent of its workforce last year. Even if 5 percent of the 60,000 accept the current offer, that would mean 3,000 people leaving.

CEO Satya Nadella framed the trade-off nearly two years ago on a podcast. "Our total people costs will go down, our cost per head will go up, and my GPU per researcher will go up," he said. Sources familiar with the current offer told The Verge it mirrors standard severance: cash based on tenure, accelerated stock vesting, subsidized health coverage for a limited time, and months of career services. More than 30 percent of those eligible took the earlier retirement package.

Microsoft has run layoffs regularly for a decade, but they have come every few months over the past two years. Rumors point to further cuts in November and January, and how many people take this exit offer will shape those numbers.

Former Microsoft Entra product manager Merill Fernando said the company does need to slim down. "Microsoft needs fewer people," he said, adding that he has watched how work gets done inside the company. "Lots of small orgs. Layers on layers. Silos everywhere." Each group, he said, had its own priorities and its own decision makers, which makes collective action hard.

Nadella spoke about that friction on a podcast last year with Stripe co-founder John Collison. He said a comic depicting Microsoft teams pointing guns at each other defined the company's cultural narrative "more so than reality," while acknowledging real tensions underneath it. "In some sense, some of these divisional tensions are real issues that need to have tension. Social cohesion is not a goal, winning in the marketplace is a goal," Nadella said.

The buyout offer lands as other departures move through Microsoft. Dan Greenawalt, who has spent nearly 27 years at the company and led Turn 10 Studios, is retiring. Playground Games studio head Trevor Williams announced the departure in an internal memo, and Greenawalt will stay on as an adviser while he transitions out. Turn 10 merged with Playground Games last month, and more than 70 people at Turn 10 were laid off last year.

Helen Chiang, Xbox's first chief operating officer and a 21-year Microsoft veteran, also left the company. She was promoted to the role in July after heading Minecraft. Xbox chief Asha Sharma announced the departure in a short memo, writing, "Helen Chiang is leaving Microsoft today. I'm grateful for her years of service and wish her well." The company said it would share more on COO leadership once plans are finalized.

Eligible employees have until December to decide on the voluntary exit offer.