Microsoft offers redundancy to 60,000 of its 223,000 staff

Microsoft will offer redundnancy packages to up to 60,000 staff as the tech giant tries to keep costs under control and pare its workforce as it spends hundreds of billions of dollars on artificial intelligence.

Employees in the US, Canada, UK and India who work in certain divisions and are at the vice-president level or below will be eligible to apply for severance packages, according to a memo from chief people officer Amy Coleman on Monday.

Xbox, Windows and its Copilot AI chatbot product are among the divisions included in the programme, a person familiar with the matter said. Staff who work in sales, marketing, cyber security, quantum computing, data centres and a few engineering teams are not eligible, the person added.

Spokespersons for the Irish business would not comment on whether any staff based here will be able to take up the offer. Microsoft does have people in Ireland working on its Windows, Xbox and Copilot teams.

“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support,” Coleman wrote. “It also gives participating organisations another way to adapt their workforce to changing needs.”

Microsoft, like its Big Tech rivals, has been spending hundreds of billions of dollars on AI, developing its own frontier-level models and constructing or leasing dozens of new data centres every quarter to meet surging internal and external demand.

Chief executive Satya Nadella has urged staff to incorporate AI into every part of their working lives to improve their productivity. In a July 2025 memo after an earlier round of lay-offs, he wrote in an all-staff memo that the company needs to “reimagine our mission for a new era”.

The new “voluntary exit offer” comes after Microsoft made a “voluntary retirement programme” available to older, longer-serving staff in July. More than 30 per cent of the 8,750 eligible employees took the buyout, which was made more attractive by offering a bonus on top of the normal severance package.

The Redmond, Washington-based company is expecting a lower proportion to accept the voluntary exit offer because the employees included in the offer are younger and no additional incentive is given beyond standard severance for their length of service, the person familiar said. Typical take-up levels for buyouts in tech are between 3 per cent and 5 per cent, they added.

Microsoft had about 223,000 staff at the end of June according to its latest filing, a figure that has remained largely flat for several years.

In July, Microsoft held its $175 billion (€157 billion) capital expenditure forecast steady for the year and said it signed $130 billion in new data centre leases in its fiscal fourth quarter. This rapidly escalating capex means the company needs to find new ways to balance its books.

Spending has started to eat into free cash flow, which fell 23 per cent year-on-year to $19.6 billion during the last quarter. The company reports its fiscal first-quarter earnings on Wednesday.

The buyout offers are not designed to specifically offset AI infrastructure spending, but rather reflect the fact that “work is changing very quickly” and executives want more innovation from engaged staff, the person said.

Microsoft is still recruiting in key areas and makes counter-offers to keep talent its rivals try to poach. - Copyright The Financial Times Limited 2026