Microsoft Rolls out First Buyout Plan as AI Spending Reshapes Workforce

With input from CNBC, Bloomberg, Forbes, the Verge, the Wall Street Journal, and Business Insider.

Microsoft is trying something it’s never done before: offering voluntary buyouts to a chunk of its US workforce as the AI boom starts to rewrite how the company operates.

The plan could reach up to 7% of its US employees – roughly 8,700 people – though not everyone will qualify. The offer is aimed at staff below the senior director level whose age plus years at the company add up to at least 70. Think long-timers nearing retirement, not fresh hires.

Details land on May 7. After that, it’s up to employees to decide whether to take the package and walk away.

Inside Microsoft, the move is being framed as giving people options. A softer approach than layoffs, at least on the surface. The company has already cut jobs in recent years, trimming costs as it ramps up spending elsewhere.

And that “elsewhere” is doing a lot of work here.

AI is expensive. Really expensive. Microsoft is pouring tens of billions into data centers and infrastructure to keep up with demand for generative AI tools, while rivals like Alphabet and Amazon are doing the same. The arms race isn’t slowing down.

At the same time, the software business itself is shifting underfoot. New AI-powered coding tools – including those from Anthropic – are starting to challenge how traditional software gets built and sold. That pressure is hitting valuations and forcing companies to rethink staffing.

Microsoft’s buyout plan fits neatly into that moment: cut quietly, invest loudly.

There’s another change happening behind the scenes. The company is reworking how it pays people. Stock awards will no longer be tightly tied to cash bonuses, giving managers more room to reward top performers as they see fit. The performance review system is getting simplified too, trimmed down to fewer compensation paths.

Taken together, it’s a reset. Fewer people, more flexibility, heavier bets on AI.

For a company that employs over 120,000 people in the U.S. alone, even a “small percentage” adds up fast.