Microsoft only expects a fraction of the 60,000 employees who received buyout offers Monday to accept those packages and leave the company.
A spokesperson for the Redmond-based tech giant said the company is anticipating an acceptance rate as low as 3% to 5% – fewer than 3,000 employees – based on comparable offers observed across other firms.
The buyouts, which cover roughly a quarter of the company’s workforce, come as it tries to control its labour costs while avoiding layoffs.
Microsoft’s global workforce totals about 223,000 employees, roughly 52,000 of whom are based at the company’s Redmond headquarters. The company’s head count peaked at 228,000 in 2024.
The company announced Monday morning that eligible employees at the vice president level and below in the US, Canada, India and the United Kingdom would receive a “voluntary exit offer” of a standard severance package, based on their location. They’ll have until early December to decide.
In a memo to employees, Microsoft chief people officer Amy Coleman said the move was building off the voluntary retirement program earlier this year, which was available to more than 8,700 US-based employees, roughly one-third of whom took the offer.
“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.”
The deals are not sweetened the way they were for the earlier retirement program and since the cast is much wider, there’s a lower chance of netting people on the fence about staying at the company.
Multiple organisations within Microsoft are fully participating in the buyout program, including the gaming, Windows, Copilot, human resources and finance divisions, according to a screenshot of an internal memo viewed by The Seattle Times.
Microsoft’s artificial intelligence, legal and cloud teams are partially participating. Organisations such as marketing, commercial business and security will not be participating.
Microsoft’s stock price briefly surged after the buyout news and ended up roughly 1.5% on the day. The buyout announcement came two days before the company reports financial results on Wednesday for the first quarter of its 2027 fiscal year, which ran from July 1 through Sept 30.
As the company continues cost-cutting, it’s showing renewed cloud-computing growth that it says is based on AI demand. Investors have responded.
After a rough 2026 fiscal year, Microsoft fully rebounded this summer and briefly hit a record high share price of US$543.45 (RM2,207) on Oct 13, which is about 2% more than when the market closed on Monday.
Microsoft’s AI-related capital expenditures, coupled with slowing cloud computing revenue growth, worried Wall Street for the front half of 2026. The market anxieties culminated in a US$1 trillion (RM4 trillion) valuation loss for Microsoft between October 2025 and June.
Analysts are estimating Microsoft will report almost US$91bil (RM370bil) in quarterly revenue, a 16.8% increase from the year before.
Microsoft may also include estimates for the cost of its buyout program on Wednesday, as Chief financial officer Amy Hood did earlier this year before the voluntary retirement program. Microsoft took a US$900mil (RM3.7bil) charge for those buyouts – a fraction of the company’s latest quarterly profit of US$35bil (RM142bil).
Since May 2025, Microsoft has been trying to reduce its corporate workforce, first through waves of mass layoffs and now through more creative buyout programs. The company laid off about 15,000 employees last year over the course of several months, affecting about 3,200 Washington-based workers.
Microsoft said it was enacting layoffs to create a flatter, more nimble company, with fewer layers of management and more accountability per employee, essentially blurring the line between employee and manager. The company was also cutting costs as its capital expenditures – investments in AI-related infrastructure – ballooned in 2024 and kept growing in 2025. Microsoft said earlier this year it plans to spend US$190bil (RM772bil) on custom computer chips and data centres in 2025, fuelled by AI demand.
Layoffs have continued this year, however they’ve been smaller and have mostly affected the company’s gaming division, which is under new leadership and in the middle of a hard reset.
But after last year’s layoffs, leadership took note of the souring culture. Microsoft was posting better financial results and bringing in more cash than ever, while employees felt blindsided by layoffs. After Microsoft CEO Satya Nadella addressed this incongruence in July 2025, Coleman and others spent the past year trying to reshape the company amid an AI-driven shift.
Coleman said in July that Microsoft’s workforce reductions were not driven by AI, at least not by what people would expect. Microsoft says it is not replacing workers by AI agents or workflows. But aside from cost-cutting measures, the company says its various workforce reduction efforts are geared toward shedding outdated roles and teams as AI changes the business.
In response to the AI-driven changes, Microsoft is trying to reskill and relocate workers and is still hiring, keeping its overall head count relatively flat over the past few years. Even after massive layoffs last year, the company’s workforce only dipped by 5,000 between 2025 and 2026.
Earlier this year, Microsoft President Brad Smith told The Seattle Times that the company’s Redmond workforce of about 52,000 remained relatively unchanged over the past year, despite thousands of workers affected by layoffs. The company credited that to reskilling efforts and increased hiring for new teams. Microsoft said earlier this year it was able to “redeploy” about 4,000 employees who were given pink slips last year.
“The Voluntary Exit Offer is new for us. We’ll learn from it,” Coleman wrote on Monday. “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.” – The Seattle Timesa/Tribune News Service
