- Microsoft wants to trim its headcount with a voluntary redundancy buyout scheme
- The voluntary redundancy has been offered to 60,000 employees with a Microsoft experience score of less than 70
- At the same time, Microsoft is spending billions on new AI infrastructure
Microsoft is looking to slim down its workforce and is hoping that a voluntary redundancy buyout will convince some workers to leave of their own accord.
The redundancy buyout has been offered to 60,000 Microsoft employees across the United States, United Kingdom, Canada, and India and represents about a quarter of the company’s global headcount.
While no official reason has been given for the cutting down on headcount, the company was expected to funnel around $50 billion into spending between July and September - with AI infrastructure such as data centers and computing taking up a significant chunk.
Microsoft trims headcount
Those offered the voluntary redundancy package are all considered to have an experience score of 70 or less according to Microsoft’s scale. The terms offered to employees are more generous than standard redundancy packages, with some employees with a score between 65 to 67 receiving two weeks of pay for every six months at the company.
Those below 65 on the experience scale will receive just one week for every six months spent working for Microsoft. Extra support has also been offered to workers who accept voluntary redundancy including continued healthcare coverage, outplacement support, and extended stock vesting.
Employees considering the voluntary redundancy package have until December to make a decision. Some sectors of the business, such as marketing, sales, and engineering teams have reportedly decided to refuse to participate.
"The Voluntary Exit Offer is new for us. We’ll learn from it,” Microsoft Chief People Officer Amy Coleman wrote in a memo to employees. “At the same time, we’ll keep helping people focus on the work that matters most, build new skills and, where it makes sense, find new opportunities across Microsoft.”
Microsoft bets big on AI
The company has reported strong growth this year with revenue increasing 18% year-over-year to just over $90 billion.
Microsoft, alongside other top AI firms, have spent hundreds of billions on AI data centers, new computing chips, and the associated infrastructure in the expectation that AI will deliver the productivity and efficiency increases promised by developers.
The tech giant has opened 31 new data centers in the last quarter, and cut the ribbon on its $7.3 billion Fairwater 1 facility in April 2026 - much to the annoyance of local residents.
Microsoft has also taken steps to reduce the hardware costs of its data centers. The company’s most powerful chip yet - Maia 300 - was unveiled in October, with the company already using the chip for inference with Copilot. The design delivers 1.7 times more tokens per watt than leading GPU infrastructure, Microsoft said.
Microsoft said the chip will become the company’s main inference capability thanks to the reduced token costs and increased efficiency.
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