Microsoft has announced a major workforce restructuring, offering buyout packages to approximately 60,000 employees, about 27% of its global workforce. The move, which affects workers in the U.S., Canada, India, and the United Kingdom, is part of the company's strategy to control operating expenses and invest heavily in artificial intelligence. Employees must decide by December whether to accept the offer, with those who do leaving by December 31.
The eligible employees include almost all workers outside of the C-suite and executive level, spanning divisions like Copilot, finance, human resources, and Xbox. Marketing, commercial business, and security teams are excluded from the offer. This initiative follows a voluntary early retirement program introduced six months ago, which saw 30% of the eligible 8,750 U.S. workers accept the offer. Additionally, Microsoft laid off 4,800 employees three months later.
Microsoft is under significant financial pressure to manage its operating expenses while investing between $175 billion and $190 billion in 2026 to expand its AI capabilities. The company is focusing on selling generative AI through its Copilot software assistant and renting cloud supercomputing capacity via Azure. Investors have expressed concerns about the high costs associated with AI development and whether the technology will deliver sufficient returns.
The tech sector has seen a surge in job cuts in 2026, with Microsoft's restructuring adding to the trend. Other major tech companies like Oracle, Amazon, and Meta have also announced significant layoffs to free up capital for AI infrastructure. Bill Gates, co-founder of Microsoft, remains one of the wealthiest individuals globally, with a net worth of approximately $119 billion.