Microsoft Offers Retirement Buyouts to 7% US Workforce Amid Data Centre Spending and AI Competition

Microsoft is introducing voluntary buyouts for some U.S. staff, marking a first for the 51-year-old company, as artificial intelligence reshapes the wider technology sector and forces large employers to rethink costs, staffing and reward structures.

Microsoft Offers Retirement Buyouts to 7% US Staff as AI Transforms Tech Jobs

About 7% of Microsoft’s U.S. workforce qualify for the one-time retirement offer, according to a person with knowledge of the plan who asked not to be identified because the company has not publicly shared the exact figure.

The Microsoft voluntary buyouts programme applies to U.S. employees at the senior director level and below whose age plus years of service equal at least 70. Staff on sales incentive schemes are excluded from the offer, which targets other roles.

• Microsoft Issues Buyout Memo as AI Spending Rises After Layoff Rounds

The buyouts were outlined in a memo circulated on Thursday, with eligible workers and their managers due to receive full terms on 7 May. The move follows several rounds of layoffs last year that had already trimmed Microsoft’s cost base.

Microsoft has been increasing capital expenditure on data centres to support cloud customers using generative AI tools. Alphabet and Amazon are pursuing similar investments, while software company shares have come under pressure from new coding products from Anthropic and other developers.

As of June 2025, Microsoft employed 228,000 people worldwide, including 125,000 in the United States, highlighting the scale of the potential impact even though the company has limited the Microsoft voluntary buyouts to a minority of domestic staff.

Amy Coleman, executive vice president and chief people officer at Microsoft, wrote in the memo viewed by CNBC that, "Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support."

The memo also detailed changes to pay and performance practices. Microsoft will stop requiring managers to link stock awards directly to cash bonuses, so that "managers have more flexibility to meaningfully recognize high performance," and will cut manager pay choices from nine options to five.