Microsoft offers voluntary buyouts to 60,000 employees as AI spending rises

Microsoft has offered voluntary buyouts to 60,000 employees, according to Amy Coleman, the company's executive vice-president and chief people officer. The Independent reports this is about 27% of the company's global staff, or more than a quarter. Coleman announced the move in a blog post on Monday.

The Independent reports that the Voluntary Exit Offer is open to eligible employees in the United States, the United Kingdom, Canada and India. Microsoft, based in Redmond, Washington, had about 223,000 full-time employees at the end of June.

Bloomberg reported on Monday, as cited by The Guardian, that some of Microsoft's best-known divisions will take part, including Xbox, Windows and Copilot, its AI tool. Employees in certain divisions, including cybersecurity, datacenters and marketing, would not be eligible.

In a statement, Coleman said the offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support. She said it also gives participating organizations another way to adapt their workforce to changing needs. In her blog post she wrote that the offer is new for the company and that Microsoft will learn from it. Microsoft did not respond to a request for comment on further details.

The offer is much larger than earlier plans. The Independent reports that in May Microsoft planned to offer buyouts to about 8,750 people, or 7% of its US workforce, according to two people familiar with the plan. The Guardian says the company announced voluntary retirement in April for about 7% of its US staff. In July, Microsoft said it was cutting 4,800 jobs, about 2.1% of its global workforce, including many in its Xbox business.

The buyouts come as Microsoft spends heavily on AI. The Independent reports that investment in data centers for AI is likely to top $700 billion this year, making memory chips, processors, other equipment and electricity more expensive. Economists expect this to push up inflation at least through the end of the year. Microsoft is due to publish quarterly results on Wednesday, and its shares hit an all-time high this month.

Other tech firms have also cut jobs this year. The Guardian reports that Meta announced plans in April to cut 10% of staff, about 8,000 people, and that Oracle cut about 13% of its workforce, or 21,000 jobs, in June. It adds that it is unclear whether such cuts have raised efficiency, and that Meta has scaled back its plans. A National Bureau of Economic Research working paper found that 90% of 9,000 senior executives surveyed said AI had yet to bring greater productivity.