After 4,800 layoffs, Microsoft offers voluntary exits to 60,000 employees: Full story in 5 points

Microsoft is offering roughly 60,000 employees voluntary buyouts. Several teams within the company are "participating" in this programme, with employees in India also being eligible. Here is everything you need to know about Microsoft's voluntary exit option.

Microsoft has announced that it is offering a voluntary exit option to its employees. In a memo shared on Monday, the company said that it was introducing this limited-time offer for employees who may be willing to leave the company.

As per reports, roughly 60,000 workers, or about 27 per cent of Microsoft's global workforce, are eligible to take this voluntary payout. The voluntary exit option (VEO) was announced by Microsoft's chief people officer, Amy Coleman.

From who is eligible for the voluntary exit plan to the potential severance package for those who choose to take it, here is all you need to know.

1. What is Microsoft offering?

Microsoft is offering employees a voluntary exit. A voluntary exit option allows employees to leave the company in a sort of a mutual agreement, usually with a severance package. You can consider this similar to buying out one's contract, instead of firing an individual.

"This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," Amy Coleman said in the memo. "It also gives participating organisations another way to adapt their workforce to changing needs."

2. Who is eligible?

As per Coleman, the offer is available to eligible employees at level 70 and below in participating teams across India, the US, the UK and Canada. Microsoft's seniority system starts at level 59, while level 70 corresponds to vice-president. As per Reuters, around 60,000 of the company's 223,000 full-time employees are eligible.

The programme reportedly covers employees in several departments, including AI experiences, Copilot, finance, human resources, Xbox and Windows and Devices. Though some marketing, sales, commercial business, security and engineering teams are not participating.

Eligible employees will be notified via email. It is believed that employees will need to make a decision by December. Employees who take up the offer will leave Microsoft on December 31, 2026.

3. What about severance package?

Any voluntary exit option comes with a severance package. While Microsoft has not publicly disclosed the terms of this offer, there are reports online that give us some clue about the potential package an employee could receive.

According to Business Insider, US employees will get a standard severance package, which is capped at 39 weeks of base pay for levels 67 and below. Level 68 employees will receive 12 months of salary.

Do note that this is for Microsoft employees based in the US. It is likely that packages for those in India or other regions get a different offer.

4. Why is Microsoft making the offer?

Microsoft said the programme would provide flexibility for employees and help participating teams adjust their workforces. "The Voluntary Exit Offer reflects an important part of how we're evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter," Coleman said.

The company is also spending heavily on AI data centres and chips. It has forecast capital expenditure of $175 billion for the 2026 calendar year, while spending for the September quarter was expected to exceed $50 billion. Microsoft reported positive free cash flow of $19.64 billion in the second quarter, down 23 per cent from a year earlier.

It is likely that by reducing its workforce via voluntary exits, Microsoft will be able to cut spending.

5. Will there be layoffs?

Microsoft has not announced layoffs alongside the new voluntary offer. But in the past, the company has laid off employees even after offering voluntary exits. Earlier this year, Microsoft offered voluntary retirement options to about 7 per cent of its US workforce, or about 9,000 senior-level employees. While 30 per cent of them reportedly took up the offer, Microsoft did cut about 4,800 jobs a few weeks later.

Microsoft has not given any target for the number of employees it expects to take up on the voluntary exit option this time around. However, if the company gets a similar proportion to its previous programme, we may see as many as 20,000 workers leaving the company. This would make it one of the biggest reductions in Microsoft's workforce. The company cut about 18,000 jobs when it acquired Nokia's phone business in 2014.