Microsoft has announced a voluntary exit programme for around 60,000 employees across India, the US, the UK and Canada, marking its second voluntary workforce reduction initiative this year. The programme, outlined in a memo by Chief People Officer Amy Coleman on Monday, extends to employees up to level 70 on the company’s internal hierarchy, including general managers and some vice president-level staff.
The Voluntary Exit Offer (VEO) covers more than a quarter of Microsoft’s workforce of approximately 223,000 employees. Unlike the retirement programme introduced earlier this year, the latest offer has no age or minimum-tenure requirements, and eligibility is not linked to employee performance.
Eligible employees will receive emails outlining their individual terms and will have until the first week of December to accept the offer. Employees who opt in are expected to leave the company by the end of the year.
“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 in the memo. She added that the programme would give participating organisations “another way to adapt their workforce to changing needs”.
The package follows Microsoft's standard severance structure
The buyout package mirrors Microsoft's standard severance benefits, including base pay determined by an employee's tenure and level, continued stock vesting, healthcare coverage for a specified period and career transition assistance. However, it does not include the extended healthcare benefits offered under the company's earlier voluntary retirement programme.
During Microsoft's US layoffs earlier this year, severance packages began at 60 days of base pay and extended to as much as 39 weeks for most employees. Staff at level 64 and below received one week of base pay for every six months of service, while employees at levels 65 to 67 received two weeks.
Participation in the latest programme varies across the company, with business leaders deciding which teams are eligible. Sales, marketing, commercial business, security, and discovery and quantum teams are among the groups excluded from the offer.
Teams participating in the programme include Copilot, CoreAI, Windows + Devices, Xbox, finance and human resources. Cloud + AI and Microsoft AI are participating partially, according to people familiar with the matter.
Buyout programme follows earlier retirement offer and job cuts
The latest initiative follows Microsoft's Voluntary Retirement Programme launched in the spring, the first such programme in the company's history. That offer was extended to approximately 8,750 US employees at senior director level and below whose combined age and years of service totalled at least 70.
Around 30% of eligible employees accepted the retirement offer, resulting in a $900 million charge for Microsoft in April. Coleman later said the programme helped reduce the scale of subsequent layoffs.
Microsoft nevertheless cut approximately 4,800 jobs in July, representing around 2% of its workforce, followed by several hundred additional job cuts in September. These reductions came after the company eliminated more than 15,000 positions in 2025.
As of June 30, Microsoft's workforce stood at approximately 223,000, down from 228,000 a year earlier.
AI investments put focus on workforce and operating costs
The voluntary exit offer comes as Microsoft seeks to manage operating expenses while committing tens of billions of dollars to data centres and artificial intelligence infrastructure. The company has maintained that the programme does not signal a broader need to reduce headcount and is not a replacement for layoffs, which remain an option.
Microsoft expects a smaller proportion of employees to accept the latest offer than participated in the earlier retirement programme.
The company's upcoming quarterly earnings announcement could provide an initial indication of the financial impact of the initiative. Coleman described the programme as new for Microsoft in her memo and said in July that the company was evaluating whether voluntary exits could become a recurring, potentially annual, option.
