Microsoft is implementing a Voluntary Exit Offer (VEO) for approximately 60,000 employees, a move that represents more than a quarter of its total workforce. This initiative is part of a broader strategy to reduce costs and reshape its staff as the company significantly increases its investment in artificial intelligence.
Eligible employees in the U.S., Canada, the UK, and India, at the vice president level and below, can opt for the VEO. As of the end of June, Microsoft employed 223,000 individuals, a slight decrease from 228,000 at the end of 2025.
This strategic shift towards AI is concurrent with substantial spending on data centers that support cloud services for entities like Anthropic and OpenAI. Microsoft CEO Satya Nadella has previously addressed public concerns regarding the environmental impact and costs associated with the company's AI data center expansion, noting that the daily water usage of one data center over a year is comparable to that of a single restaurant.
Employees have until December to accept the buyout offer, with their last day at Microsoft set for December 31. This program follows a previous round of layoffs in July, which affected 4,800 employees globally, including 1,600 staff within the Xbox division as part of a business restructure.
Earlier this year, Microsoft also conducted its first voluntary retirement program, which saw more than 30% of eligible employees participate.