Microsoft offers voluntary buyouts to 60,000 employees as AI spending hits $175 billion

Microsoft is offering voluntary buyouts to around 60,000 employees as it prepares to spend a forecast $175 billion on capital expenditure in the 2026 calendar year, Reuters reports.

The programme covers eligible employees in Canada, India, the UK and the US at level 70 and below. Xbox, Windows, Copilot, AI experiences, finance and human resources teams are among those eligible. Marketing, commercial business and security teams are excluded.

Chief people officer Amy Coleman set out the rationale in a memo. "This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," Coleman said.

She added: "It also gives participating organisations another way to adapt their workforce to changing needs."

What does this change for game teams?

For Xbox, this is the third workforce action in quick succession. The buyout offer lands on top of a restructuring that cut 4,800 jobs globally and prepared the divestiture of up to five studios.

The practical effect is a voluntary channel for departures rather than imposed cuts. Employees choose. Teams lose people on a timeline shaped by the programme, not by manager selection. Studios inside the Xbox organisation now face staffing uncertainty alongside the studio divestment process already underway.

Level 70 and below defines the population. That bracket covers the bulk of individual contributors and middle management in the eligible units. Senior leadership sits outside the scheme.

The money behind the decision

The $175 billion capital expenditure forecast covers AI data centres and chips. That figure has drawn investor scrutiny over whether returns will justify the cost, and the buyout programme reads as a cost-control measure that funds AI growth without forced redundancies at scale.

Microsoft employed 223,000 full-time staff worldwide as of June 30th, 2026. The 60,000 eligible employees therefore represent a substantial share of the total workforce, though uptake is voluntary and cannot be predicted in advance.

The company framed the design as deliberate. It said the programme is voluntary, time-limited and based partly on lessons from an earlier voluntary retirement scheme. That prior scheme suggests Microsoft studied how an opt-in exit actually performed before scaling the model.

A pattern of cuts, not a one-off

This is not Microsoft's first move this year. An earlier programme covered around 9,000 employees, equal to 7% of the company's US workforce. The Xbox restructuring then removed 4,800 roles globally and put up to five studios on the path to divestment.

The sequence tells a clear story. Microsoft is shrinking headcount in some units, exiting whole studios in gaming, and redirecting capital toward AI infrastructure. Gaming sits inside that reallocation, not outside it.

For the wider industry, the signal matters. Xbox studio divestments will put development teams and IP on the market. Buyers and publishers watching those assets will also watch whether buyout uptake concentrates departures in specific Xbox teams, which would reshape available talent and studio capacity.

What happens next

Eligible employees are expected to receive details of the programme shortly. The take-up rate will determine the real headcount impact, and Microsoft has not published a target. Watch the closing window of the time-limited offer and the fate of the five studios marked for divestment; both will define the shape of Xbox and its workforce through 2026.