Microsoft has extended a voluntary exit offer to approximately 60,000 employees across the U.S., Canada, India, and the U.K., representing about 27% of its workforce. This program targets employees at experience levels up to vice president and is designed to help the company enhance capital efficiency amid a heavy investment phase in artificial intelligence (AI) infrastructure. Eligible staff must decide by early December, with departures effective at the end of the year.

This initiative follows earlier workforce adjustments by Microsoft, including a voluntary retirement program for select U.S. employees announced six months ago and layoffs affecting 4,800 workers in July. The moves are part of Microsoft's broader strategy to balance the significant costs associated with expanding its data center capacity to support AI workloads for clients such as Anthropic and OpenAI, which has driven capital expenditures beyond $50 billion in the recent quarter.

Microsoft’s transformation hinges on evolving its business model to charge customers based on AI usage while equipping its teams with AI-powered tools, which has led to measurable productivity improvements. The company aims to reposition its workforce according to growth priorities without compromising its financial health. Despite competitors like Alphabet and Amazon reporting negative free cash flow, Microsoft maintained positive free cash flow of $19.64 billion in the second quarter, albeit a 23% decline year over year.

According to a source familiar with the plan, some marketing, sales, and engineering groups have opted out of the new offer, and no specific target for participation has been set. This new buyout expands eligibility to higher-level employees compared to prior programs, reflecting a continued effort to streamline operations amid the ongoing AI-driven business evolution. Microsoft is expected to provide further financial details with its upcoming third-quarter earnings report scheduled for Wednesday.