Microsoft offers a paid way out to about 60,000 employees, Xbox included

Microsoft is offering a slice of its workforce the chance to leave on their own terms, with severance. Chief people officer Amy Coleman announced the Voluntary Exit Offer on Monday, October 26, in a memo the company also posted on its official blog. It is open to employees at level 70 and below on participating teams in the US, Canada, the UK and India. The memo gives no headcount, but Bloomberg reports that about 60,000 people qualify, roughly 27% of the 223,000 Microsoft employed at the end of June.

Eligible employees got an email with a link to their individual offer. According to GeekWire, they have until the first week of December to decide.

A paid exit, not a layoff

In a layoff, the company picks who goes and when. In a voluntary exit, the company puts a package on the table and the employee decides whether to take it. Anyone who says no keeps their job.

GeekWire says the package matches Microsoft's standard severance: base pay tied to tenure and level, continued stock vesting, health coverage for a set period and career transition help. Because the money is the same a laid-off worker would get, a Microsoft spokesperson told KIRO Newsradio the company doesn't consider it a buyout. The difference is that the worker picks the timing.

Microsoft hasn't set a target and says the offer doesn't replace layoffs, which remain possible. For scale, The Register points out that 3% to 5% of eligible Google employees took a similar offer in 2025. If the same share of Microsoft's 60,000 eligible employees said yes, somewhere between 1,800 and 3,000 people would leave.

How it differs from April's retirement offer

This is Microsoft's second exit program of 2026. The first, a voluntary retirement offer in April, was US-only and far narrower. It stopped at level 67, senior director, and required age plus years of service to add up to at least 70, say a 50-year-old with 20 years at the company. About 8,750 people qualified and roughly 30%, or around 2,600, took it. Microsoft booked a $900 million charge for those departures.

The October offer drops the age and tenure test and doesn't consider performance. It also reaches level 70, which covers general managers and some employees with vice president titles, though not corporate vice presidents. The trade-off is a thinner package: it lacks the extended health coverage that made the spring program attractive. In July, Coleman said those retirements had shrunk that month's layoffs and that Microsoft was looking at offering voluntary exits on a regular basis.

Xbox, Windows and Copilot are in

Each business decides whether to take part. Bloomberg lists Xbox, Windows, Copilot and Finance among the participants, and Newsweek adds HR and the AI experiences group. Sales and marketing are out, along with some data center staff.

For Xbox, the offer lands in the middle of a long cutback. Microsoft eliminated about 4,800 jobs in July, most of them in gaming, and Fortune reported on October 20, citing people familiar with the plans, that Xbox has cut 1,868 of the 3,200 roles it plans to eliminate, with more rounds due in October, November and January. In France, Microsoft will shut down Arkane Lyon, the studio making Marvel's Blade, unless a buyer or partner turns up by December 13, after the company extended the deadline by a month.

Where AI fits in

According to Microsoft, it doesn't. GeekWire reports that the company says the offer doesn't mean it needs fewer people, and Microsoft told The Register that its talk of "changing needs" isn't code for AI automation.

What does show up in the books is the infrastructure bill. Bloomberg reports Microsoft spent $41 billion between April and June, mostly on data centers and AI chips, and expected to spend $50 billion from July through September. GeekWire frames the offer against Wall Street pressure on big tech to hold down operating costs while they pour tens of billions into data centers. We break down why that money isn't paying for itself yet in why AI companies lose billions even as revenue grows.

Microsoft reports earnings on Wednesday, October 28, after the market closes, with an analyst call at 2:30 p.m. Pacific, and GeekWire notes it could include an estimate of what these exits will cost, as it did with the $900 million for April's program.