Microsoft has weathered bruising workforce cuts across its more than five decades of history: roughly 18,000 employees laid off in July 2014, another 10,000 in January 2023, and about 15,000 let go over the course of 2025. Its newest maneuver, however, is framed around choice rather than termination.

On Monday, the company announced a Voluntary Exit Offer (VEO)—a program widely described as a buyout—covering up to 60,000 employees, roughly a quarter of its global workforce. Programs of this kind typically pair financial incentives with a limited opt-in window, letting companies reshape teams without unilateral terminations while giving employees a say in whether—and when—to leave. In a memo to staff that Microsoft also published on its blog, Amy Coleman, the company’s executive vice president and chief people officer, wrote that the VEO “gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support.”

According to the memo, the offer is open to “eligible employees in participating teams in Canada, India, the United Kingdom, and the United States at level 70 and below.” Microsoft’s internal career ladder begins at level 59 for entry-level hires; level 70 sits well within the company’s senior leadership ranks. Not every organization is on board. Coleman wrote that participation “varies based on each business’s priorities, customer commitments, and workforce needs.” Eligible employees have until early December to decide, and those who accept will depart on Dec. 31, CNBC reported.

Microsoft insists the program is not about shrinking, and it expects only a small fraction of eligible workers to accept. Still, the announcement lands at a moment when the company is pouring money into AI data centers, and some economists read it as part of a broader recalibration across Big Tech—one built on fewer workers and more equipment.

Who got the offer—and who didn’t

Microsoft has not published a list of participating teams, but the contours have emerged. A source familiar with the matter told Reuters that the offer spans employees in AI experiences, Copilot, finance, human resources, Xbox, and Windows + Devices, while marketing, commercial business, and security teams are excluded. Bloomberg reported a similar lineup, according to TechCrunch, and a Microsoft spokesperson said some data center, sales, and marketing employees are not eligible.

The split sketches a rough map of where Microsoft wants to hold on to people: the teams that build and run its data centers, sell its products to businesses, and keep its customers secure. It is not a clean story of AI winners and losers, though. Some of the teams building Microsoft’s AI products, including Copilot, are among those being offered a way out.

Microsoft says it expects few takers

Reached for comment, a Microsoft spokesperson confirmed to Fortune that the VEO is being offered to 60,000 employees, but made clear that the intent is not to significantly reduce the size of the workforce.

“If you look across the industry, you see that similar voluntary programs have around a 3% to 5% uptake,” the spokesperson said. “In our case, that feels accurate to us; we anticipate an under 5% uptake on the 60,000 employees that are eligible for the program … We don’t expect 60,000 people to walk out the door, and we would never want that. We want the right talent in the right places. We want engaged talent, and we want talent that’s really helping us innovate and move as quickly as we need.”

Microsoft CFO Amy Hood echoed that message in her quarterly memo to staff on Wednesday, writing that the company expects “very few people” to take the offer “because of the growth opportunities here at Microsoft,” according to Business Insider.

Even that modest projection would be a far smaller share than the roughly 30% of eligible employees who accepted the company’s first-ever voluntary retirement program this spring. That earlier offering targeted about 8,700 long-tenured U.S. employees and came with richer terms. In raw numbers, an under-5% uptake would amount to fewer than 3,000 departures, while the spring program drew roughly 2,600 takers from its smaller pool. The program’s true scale will hinge on how many of the 60,000 opt in ahead of the early-December deadline.

‘They have been hiring while they have been laying people off’

Joseph Phillips, professor of economics and dean emeritus of Seattle University’s Albers School of Business and Economics, told Fortune he does not see the VEO as a plan for major downsizing.

“I think any discussion of Microsoft’s workforce planning needs to start with the recent history of their global workforce,” Phillips said. “Before the pandemic, in 2019, they had approximately 144,000 employees worldwide. By 2024, that had grown to approximately 228,000 employees—very rapid growth over five years. Now, they have closer to 220,000, so not much different despite announced layoffs of about 20,000 since 2024. In other words, they have been hiring while they have been laying people off.” Microsoft reported 223,000 employees as of June 30.

Phillips echoed the company’s framing that the goal is to reorient the workforce rather than shrink it. “Their business is changing, and they need to change their workforce to align with those changes,” he said. “Certainly, AI is part of that, and they are making large capital investments in AI and becoming a more capital-intensive employer, so you would expect some of the workforce growth during the pandemic will be trimmed back. I think it has more to do with reimagining its workforce and not downsizing for the sake of downsizing.”

The visa backdrop

The offer arrives less than three weeks after the Trump administration suspended Microsoft and seven other companies from the Department of Labor’s Permanent Labor Certification (PERM) program. PERM is the first step in most employer-sponsored green cards, including for many workers on H-1B visas. The H-1B itself is a U.S. visa for specialty-occupation workers and a long-standing staple of tech-industry hiring. Vice President JD Vance accused Microsoft of abusing the system, saying it laid off 6,000 American workers last year while benefiting from 6,300 H-1B approvals. Microsoft President Brad Smith called that reasoning “off base.”

Phillips says the timing of the VEO is likely a coincidence. “I suspect the VEO was in the works before the PERM suspension. If the company is moving to offshore the workforce, I think it would have more to do with the administration’s plans for the H-1B program, specifically the new fee. I am dubious of the administration’s claim that Microsoft’s earlier layoffs are part of a plan to hire more workers from overseas. As we know, the workforce level has not changed much so far.”

The $100,000 fee on new H-1B petitions that President Trump imposed in September 2025 has since been blocked in court. In August, the administration proposed a rule to make a fee of more than $100,000 permanent.

A shift from labor to capital

The financial figures point to a pivot from payroll to plant. In the fiscal year that ended June 30, the company spent $115.9 billion on property and equipment, up from $64.6 billion the year before, according to its annual report. Over the same stretch, its workforce shrank by about 5,000 people. And the spending is still climbing: in the quarter that ended Sept. 30, Microsoft’s capital expenditures, including finance leases, rose about 30% to $45.2 billion, with roughly three-quarters going to short-lived assets such as chips and networking gear, CNBC reported. Unlike data center shells and land, those shorter-lived assets age out in years rather than decades and require continual replacement. Hood said she expects spending to top $50 billion this quarter.

Microsoft has said AI isn’t driving its buyout programs, according to KUOW. Not every outside observer reads it that way.

Jay Zagorsky, clinical associate professor of markets, public policy, and law at Boston University, told Fortune that the new offer, which follows the voluntary retirement program Microsoft rolled out in the spring, may signal a rethink of how the company’s workforce will be oriented in the future. He thinks it could also send ripples across the tech industry.

“All businesses have to decide the right balance between equipment and workers,” Zagorsky said. “In academic terms, we call this the allocation between capital and labor. With the advent of AI, it is clear that all of the biggest tech companies are shifting towards more capital by building expensive AI data centers and [relying on] less labor. Microsoft’s announcement is a clear indication they want fewer workers. I expect there will be other similar announcements in the near future from other Big Tech firms as they all shift towards fewer workers and more equipment.”

This story was originally featured on Fortune.