Microsoft is cutting costs: 60,000 employees have been offered voluntary separation

Microsoft, the world's largest software maker, plans to offer approximately 60,000 employees voluntary severance packages. The new program complements the company’s efforts to cut costs and realign its workforce for the era of artificial intelligence, according to Bloomberg. The company had previously warned that its capital expenditures this year would triple on an annualized basis.

Employees who agree to leave will receive payments comparable to standard severance pay, the company said. The program will allow divisions to “adapt their workforce to changing needs,” Microsoft Chief People Officer Amy Coleman wrote in a message to employees.

According to Bloomberg sources, the program applies to divisions such as Xbox, Windows, Copilot, and the finance division. Employees working in data centers, sales, marketing, cybersecurity, and quantum computing are not included in the program. Microsoft declined to comment on these details.

This restructuring could be the largest in Microsoft's history, according to Forbes. If 30% of the 60,000 employees accept the severance package, the workforce will be reduced by 18,000 people.

Microsoft wants its employees to be people who are engaged in the complex challenges the company is trying to solve, a company spokesperson told the news agency. This echoes statements by other tech executives who have publicly made it clear that, to keep their jobs, employees must be prepared for a faster pace of work and change, Bloomberg notes.

On Wednesday, October 28, Microsoft will release its financial results. Investors will be watching closely to see if investments in artificial intelligence are starting to pay off. The company previously reported that its capital expenditures for this fiscal year will total $175 billion, compared with $64.6 billion in 2025.

Microsoft is facing significant financial pressure, forcing it to curb operating expenses amid unprecedented investments in AI, according to Forbes. To cut costs, Microsoft has laid off thousands of employees in recent years—for example, 9,000 people in July 2025 alone. However, budget cuts in some divisions have been accompanied by hiring in others. Microsoft’s total workforce—223,000 as of the end of June—has remained virtually unchanged since 2022, when the company began ramping up spending on AI and data centers, according to Bloomberg.

Microsoft shares rose 1.3% during trading in New York, outperforming the market—the S&P 500 and Nasdaq Composite indices were up less than 1% at the time. However, Microsoft has lagged slightly behind the indices this year—its shares have risen by about 10%, while the S&P 500 and Nasdaq Composite have gained more than 12% since the start of the year.

This article was AI-translated and verified by a human editor