Microsoft has introduced a Voluntary Exit Offer, a program enabling thousands of employees, including those within the Xbox division, to leave the company with a financial package. This initiative is part of a significant restructuring effort across the technology giant.
The program is reportedly available to approximately 60,000 workers, representing over a quarter of Microsoft's total workforce. Employees in divisions such as Xbox, Windows, Copilot, and finance are eligible, while those in data centers, sales, marketing, cybersecurity, and quantum computing are not. Microsoft shared the high-level details of the program on its blog, with further insights reported by Bloomberg.
This announcement comes shortly before Microsoft's scheduled earnings report on October 28. The company is making substantial investments in its artificial intelligence initiatives, a move that has drawn scrutiny from the investment community regarding its capital expenditure.
Previously, Microsoft offered a Voluntary Retirement Program in April, which included severance pay, continued stock vesting, and extended health benefits, with about 33% of eligible employees accepting the offer. This was followed by substantial layoffs in July, affecting nearly 5,000 individuals, including significant reductions at Xbox.
While specific terms of the new Voluntary Exit Offer have not been disclosed, a Microsoft spokesperson indicated to Bloomberg that participants would receive benefits comparable to a severance package. Reports suggest that Xbox may face additional layoffs in the coming months, with rounds planned for November and January 2027, though The Verge's Tom Warren noted that October's planned layoffs have been postponed.
The Xbox division, under the leadership of CEO Asha Sharma, is undergoing a significant 'reset' that has already involved workforce reductions, studio closures, and game cancellations. These changes are occurring despite Microsoft reporting robust revenue growth of 18% and a 22% profit increase in its latest financial period. CEO Satya Nadella described the company's situation, marked by massive staff cuts amidst strong financial performance, as "the enigma of success."