Microsoft is offering severance packages to 60,000 employees – for the AI revolution
Microsoft is offering voluntary severance packages to around 60,000 employees. It is the second program of this kind in the company's 51-year history. The background: The corporation is investing billions in AI infrastructure and wants to reduce personnel costs to achieve this.
The tech giant is facing a massive bill. Microsoft is investing around 145 billion US dollars in data centers and AI chips this year – almost twice as much as in the previous year. Money that has to come from somewhere. Therefore, the company intends to cut costs in the medium term and is offering a voluntary severance package to around 60,000 employees. Chief People Officer Amy Coleman calls this "more flexibility" in an official blog post. However, analysts and the media see the real reason as the enormous AI investments. The severance payments are the financial lever to manage these expenses.
What exactly Microsoft is offering
The program is officially called the "Voluntary Exit Offer." It affects teams in the areas of AI (AI Experiences), Copilot, Finance, HR, Xbox, and Windows. The fact that AI teams are also affected shows how rigorous the austerity measures are – no one is exempt. Those who work in these teams and hold an internal career level of 70 or below (which includes experienced professionals and middle management, but not top executives) can accept the offer. Marketing, Sales, IT Security, and the Commercial Business division are not affected.
Those who accept the offer will receive a severance payment based on a clear formula and will leave the company on December 31, 2026. It consists of 60 days of base salary plus one week for every six months of service. Employees in higher salary brackets receive a higher severance payment, up to a maximum of 39 weeks. Employees must decide by the beginning of December.
The scale is also remarkable. It is already the second voluntary severance program this year. In April 2026, there was the first voluntary severance program in the company's history. It was aimed at around 8,750 US employees who met specific age and length-of-service criteria. More than 30 percent of those eligible accepted it. Microsoft itself does not mention a specific number in its memo. The figures regarding the 60,000 come from consistent media reports.
The true price of the AI offensive
The fact that Microsoft is investing billions in AI while simultaneously wanting to cut staff is not a contradiction, but a strategic decision. The severance payments are not a sign of weakness, but an instrument to financially align the company for the future.
In this context, the media often speaks of a "golden parachute." Strictly speaking, however, that is the wrong term. A golden parachute protects executives in the event of a takeover. What Microsoft is offering here is a golden handshake. This refers to a generous severance payment upon voluntary departure.
All of this is not without irony. Microsoft founder Bill Gates, who no longer has an official role in the company, recently warned of this development in an interview: "The incentive structure is wrong. It says: Hire the robot, fire the human, and don't look back." The warning was published on Sunday, one day before Microsoft announced the severance payments on Monday. Of all people, the man who became a multi-billionaire with this system is criticizing from afar the very practice that is continuing his life's work.
How voluntary is the offer really?
Observers doubt the voluntary nature of such programs. Those who decline the offer must expect to be laid off for operational reasons later in the current situation. On social media, employees report concerns that a refusal could have negative consequences later on.
The Microsoft stock rose by 1.54 percent on October 26. However, a broad AI rally drove the tech markets that day, triggered by the announcement of an IPO by the AI company Anthropic. The severance payments are likely to have been well-received by investors anyway, as they underscore Microsoft's cost discipline.
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