Microsoft moves to shed quarter of workforce

The US tech giant is seeking to reduce payroll costs through a voluntary exit program covering some 60,000 employees

US tech giant Microsoft is moving to shrink its workforce through a buyout program covering some 60,000 employees, more than a quarter of its global staff, the company has announced.

The move follows thousands of job cuts earlier this year and comes as Big Tech companies seek to slash payroll costs while ramping up AI investment.

Microsoft unveiled the program on Monday, saying that it would cover roughly 27% of its 223,000 employees across selected divisions in the US, Canada, UK, and India, including Xbox, Windows, Copilot, finance, and human resources.

Microsoft has described the initiative as a voluntary exit program, under which employees can leave with severance packages. The company has not disclosed how many workers it expects to accept the offer.

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In a memo to employees, Microsoft’s chief people officer Amy Coleman said that the initiative would give eligible staff considering a departure an opportunity to leave with financial support.

The latest move follows several rounds of workforce reductions at Microsoft. In July, the company announced plans to eliminate 4,800 positions, including approximately 3,200 in its Xbox gaming division. It had already launched a voluntary exit program in April covering roughly 8,750 US employees, or about 7% of its American workforce, with around 30% reportedly taking the offer.

The cuts come as Microsoft commits enormous sums to AI infrastructure, including data centers and computing capacity, putting pressure on the company to remove other expenses.

Other Big Tech giants have also been cutting jobs while pouring billions into AI. Amazon announced 16,000 corporate job cuts earlier this year, following another 14,000 layoffs in 2025. Meta has also slashed jobs while ramping up AI investment, while Google has repeatedly launched voluntary exit programs to reduce its workforce.

The trend has fueled concerns that the technology being promoted as a driver of economic growth could also eliminate large numbers of jobs, particularly in administrative, technical, and other white-collar occupations.

The threat extends beyond the tech industry. The Netherlands announced plans on Monday to eliminate around 25,000 government positions by 2035, partly through the adoption of AI, in a drive to save €3.5 billion ($4 billion) annually. The cuts will be phased in over several years, with police and security services exempt.

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Denmark has also announced plans to use AI to free up 50 million working hours annually by 2035, equivalent to roughly 30,000 full-time positions, although it has not committed to corresponding layoffs.

Microsoft co-founder Bill Gates has warned that AI could cause major upheaval in the labor market, while arguing that certain professions, including caregiving, should remain “human reserved” even if machines become capable of performing them.

SpaceX CEO Elon Musk warned in July that AI would eventually outperform humans in any job, describing the transition as “a bumpy road.” His warning comes amid growing fears of AI spiraling out of human control following incidents involving systems defying instructions. Musk, whose company xAI develops advanced AI models, also predicted that the technology could surpass humanity’s combined intelligence within five years, potentially escaping human control within a decade.