Microsoft has offered voluntary buyouts to around 60,000 employees, more than a quarter of its workforce, as the technology giant sharply increases investment in artificial intelligence. The programme, the largest in the company’s history, comes amid a series of job cuts, limited pay increases and growing concerns among staff about working conditions.
The offer, announced last week, is Microsoft’s second buyout programme this year. Employees rushed to an internal website within an hour of the announcement to check whether they were eligible. The volume of traffic prompted speculation on the company’s internal social network that the site had temporarily buckled, although Microsoft later attributed delays to scheduled maintenance.
The move marks a further shift at a company long regarded as one of the technology sector’s more stable employers.While Microsoft’s pay packages have often lagged behind those of rivals such as Google and Meta, employees have traditionally pointed to its benefits and reputation for job security as major advantages. In September, Forbes ranked it the world’s best employer for the third consecutive year.
The latest buyouts come as Microsoft redirects substantial resources towards AI infrastructure. Two days after announcing the programme, the company reported a 32 per cent rise in quarterly profit to $36.6 billion, on revenue of $92.3 billion. Capital expenditure, largely on data centres, increased 30 per cent to $45.2 billion. Microsoft expects to spend approximately $170 billion this year.
The scale of that investment has prompted questions among employees about how the company is balancing its AI ambitions with workforce costs. Six current employees, speaking on condition of anonymity, said staff were facing mounting expectations to use AI tools, limited salary increases and uncertainty about future staffing levels.
Before the buyout announcement, a group of current and former employees circulated an open letter criticising what they described as Microsoft’s “speed-at-all-costs” approach to AI. They called for greater employee involvement in decisions about the development and use of the technology, and urged the company to stop linking AI adoption to performance rewards or disciplinary measures.
Amy Coleman, Microsoft’s executive vice president and chief people officer, said the buyouts were intended to give employees considering a change “choice and agency”. She denied that the programme was related to AI’s impact on work, but did not rule out further layoffs.
Employees have until 9 December to accept the offer. Those who do will leave the company on 31 December, receivingat least eight weeks of base pay. The final payment will depend on job level and length of service.
The programme follows several rounds of workforce reductions. Microsoft laid off 10,000 employees in 2023 and more than 15,000 in 2025. This spring, around 8,600 US employees were offered buyouts linked to retirement eligibility, with approximately 30 per cent accepting. The company cut another 4,800 jobs over the summer.
Microsoft employed 223,000 people in June, 5,000 fewer than a year earlier. It expects fewer than 5 per cent of the 60,000 employees eligible for the latest buyout to accept the offer.
Some employees have already decided to leave. One worker who had been with Microsoft for nearly a decade said she accepted the package despite being her family’s main breadwinner and having concerns about finding another job. She cited the pressure to use tools she considered unreliable, repeated restructuring and a growing gap between the company’sstated values and its actions.
Others plan to stay, although some say the latest changes have damaged morale. A senior software engineer with more than five years at Microsoft said he wanted to remain and try to improve the company. However, he said pay constraints and the buyout programme had left many colleagues feeling increasingly expendable.
Several employees said this year’s merit increases had been unusually small, in some cases below 1 per cent, while managers described rewards budgets as tight. At a company-wide meeting last month, a question about how Microsoftcould justify spending more than $100 billion annually on AI while keeping employee rewards largely flat attracted more than 80 reactions — roughly twice the response to most other questions reviewed by The New York Times.
Coleman said Microsoft was seeking to remain competitive on pay while managing its operating and capital expenditure.
The impact has also been reflected in individual compensation decisions. Gretchen Thomas, 57, a design leader who left Microsoft in September after five years, said shifting priorities and shorter deadlines had made her workload increasingly demanding.
“I just can’t believe how grim it’s gotten just in the last three years,” she said.
Although Thomas received a salary increase and bonus in line with those of her colleagues, her manager reduced her stock award, typically the most valuable part of an employee’s compensation. A memo seen by The New York Times citedher failure to “consistently” demonstrate speed, urgency and a willingness to experiment, including with AI.
Coleman declined to discuss individual pay decisions but said the company encouraged employees to experiment with its tools.
Employees who remain are also concerned that departing colleagues will not be replaced, leaving existing teams to absorb their responsibilities. Coleman said Microsoft had thousands of vacancies but acknowledged the need for “some shifts in the work force”.
The uncertainty was evident at a morale-boosting event held the day after the announcement for employees in one of Microsoft’s software divisions. A manager acknowledged that attendees were checking their emails and weighing the buyout offer, before urging them to put their concerns aside and celebrate their work.
A five-year employee who attended said nobody at his table discussed anything else.
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