Microsoft reportedly to offer buyouts to about 60,000 employees ahead of earnings

Microsoft will offer voluntary buyouts to about 60,000 employees, about a quarter of its workforce, according to reports. Bloomberg broke the news on October 26, and TechCrunch reported it the same day, citing those reports. The move, coming ahead of the company's October 28 earnings report, is seen as an effort to hold down costs to pay for AI capital spending.

This article is based on media reports. We could not confirm any announcement or internal document from Microsoft itself. We have also not verified which roles are eligible, the terms, the deadline or the details of the severance package.

What has been reported

According to the reports, the offer covers about 60,000 people, about a quarter of the workforce. It reportedly takes the form of voluntary buyouts, in which employees choose to leave, rather than layoffs of named workers. Bloomberg's headline calls it Microsoft's "latest" cost cut.

If about 60,000 people make up about a quarter of the workforce, Microsoft has roughly 240,000 employees. That figure is our own estimate based on the reported numbers, not an official Microsoft headcount. Also, 60,000 is the number of people the offer reportedly covers, not the number who will actually leave. How many accept could vary widely depending on the terms.

Why right before earnings

Microsoft reports earnings on October 28. Alphabet reports the same day, and Amazon follows on the 29th. Investors are watching how much capital spending on AI data centers will grow, and how that will affect free cash flow and borrowing.

The buyout reports came out two days before those earnings. Signaling restraint on labor costs ahead of time could help ease concerns about heavy capital spending. That is why the reports read the move as a cost cut to pay for AI capital spending. The company, however, has not officially given that as the reason.

The money is going to compute

Microsoft's recent announcements show where the money is going. On October 12, Scott Guthrie wrote that the company would deploy its in-house Azure Maia 300 inference chip at gigawatt scale (primary source). Volume production is set for 2027, and the company says the chip produces 40% more tokens per MW than leading GPU systems. On October 15, Microsoft AI announced that it had finished pretraining MAI-Base-2, a foundation model with 2.8T total and 80B active parameters. The company said it trained the model over 38 days on 16,000 GB200s (primary source).

Chips, the data centers that house them and the training of large models all require large upfront spending. If the reports are accurate, Microsoft would be offering about a quarter of its employees a way out and moving that money into compute. It is a company investing in AI by first cutting its own headcount.

What to watch

There are three things to check. First, whether Microsoft officially confirms the buyouts, and on what terms. Second, how the October 28 earnings report addresses the capital spending outlook and labor costs. Third, which divisions are covered, which will show whether the company is cutting first in jobs that AI can most easily replace.

None of this has gone beyond media reports so far. The figures come from Bloomberg and TechCrunch, and readers should treat them with caution until the company confirms them.