Microsoft Announces First-Ever Voluntary Buyout Program in 51-Year History, Targeting 7% of US Workforce (8,750 Employees)

Microsoft is introducing its first voluntary buyout program in its 51-year history. Targeting 7% of US employees, approximately 8,750 workers, this dual strategy expands AI infrastructure investment while restructuring labor costs.

Justin·April 24, 2026·4 min read

AI Summary

Microsoft is investing $37–38B annually in AI infrastructure while simultaneously offering voluntary buyouts to 7% of U.S. employees — restructuring its workforce toward an AI-first cost model. Eligibility based on 'Rule of 70' (age + tenure ≥ 70), with a base 16-week severance. AI hiring is maintained separately. On the same day, Meta formally announced layoffs. AI-related job losses in the U.S. already exceeded 30,000 in early 2026.

Microsoft has introduced its first voluntary buyout program in its 51-year history. The program targets 7% of US employees, approximately 8,750 workers. This dual strategy involves pouring tens of trillions of won annually into AI infrastructure while simultaneously reducing labor costs.

First 'Voluntary' Restructuring in 51-Year History

Microsoft (MSFT) announced the introduction of a voluntary buyout program targeting US employees. The program covers approximately 7% of all US employees, around 8,750 workers. This program allows employees to apply voluntarily rather than through mandatory layoffs, marking the first restructuring of this kind in the company's 51-year history.

The eligibility criteria follow the 'Rule of 70.' Employees can apply if their current age plus years of service at Microsoft totals 70 or more. For example, a 50-year-old employee with 20 years of service would qualify. The severance package includes a minimum of 16 weeks of basic severance pay, plus additional incentives for voluntary participation.

Pouring Trillions into AI While Cutting Labor Costs

This move comes as Microsoft aggressively expands AI infrastructure investments. The company is maintaining quarterly capital expenditures (Capex) of approximately $15 billion (about 20 trillion won) for fiscal year 2026, totaling 37-38 trillion won annually. The strategy focuses investment on expanding Azure AI services and OpenAI infrastructure.

Notably, the company continues hiring in AI-related departments while reducing headcount in traditional roles. While accepting voluntary buyout applications, Microsoft has posted hundreds of job openings for AI engineers, data scientists, and model training specialists. This represents a workforce realignment to transition cost structure toward AI-centricity.

We are continuously evolving our business, and in this process, some roles change or are consolidated.
Microsoft spokesperson

Meta Also Formalizes Layoffs on Same Day

On the same day as Microsoft's announcement, Meta (META) also formalized additional layoff plans targeting underperformers and middle management. Mark Zuckerberg had already indicated internally earlier this year that this would be the 'year of highest intensity,' and Meta is reducing headcount in traditional advertising and social teams, excluding AI business units.

Google (GOOGL) also announced departmental consolidations last quarter. Following Amazon, Salesforce, and Oracle, major Big Tech companies are pursuing simultaneous AI investment expansion and labor cost reduction. According to Challenger & Gray & Christmas, AI-attributed job losses in the US have already reached 30,000 positions by early 2026.

Investor Perspective: Cost Reduction Positive, Structural Transition a Long-term Challenge

From a short-term stock price perspective, news of labor cost reduction could be positive. Microsoft's average annual total compensation per employee is approximately $230,000-250,000, so reducing 8,750 employees could result in annual cost savings of over $2 billion (approximately 2.7 trillion won).

However, the long-term key question is whether AI-replaced workforce actually translates to productivity improvements. As AI tools like Copilot become established, the need for personnel in repetitive tasks such as software development, customer support, and content moderation may decrease. How effectively Microsoft manages this transition will determine the extent of profitability improvements in 2027-2028.

Voluntary buyout target: 7% of US employees (approximately 8,750)
Eligibility criteria: Age + years of service ≥ 70 (Rule of 70)
Severance package: Minimum 16 weeks + incentives
AI division hiring continues separately