TL;DR: For the first time in its history, Microsoft is offering voluntary buyouts to up to 7% of its US workforce. The old guard is being ushered out (or choosing to move elsewhere) as the company restructures and spends record amounts on AI infrastructure—all while its AI offerings struggle to stand out. What happened: Microsoft employees at the senior director level or below, whose age plus tenure at the company add up to at least 70, are eligible for the buyout—the company had about 125,000 US employees as of last June, which means about 8,750 people qualify. The move follows more than 15,000 layoffs at the company last year. Voluntary buyouts are unusual in Big Tech, but Microsoft is at a crucial moment trying to take the org from the Windows-and-Office empire its current veterans built and turn it into, essentially, a “planet-scale cloud and AI factory.” After reaching an all-time high in October 2025, Microsoft’s share price has now shed nearly a quarter of its value. Changing of the guard: A lot of institutional knowledge has already walked out over the past year and change—like former gaming division head Phil Spencer and former executive VP of experiences and devices Rajesh Jha. While some retired, others left for competitors like Google and Anthropic. The exodus of such knowledgeable talent can have huge adverse effects on a company’s ability to excel—just look at Boeing and IBM. Microsoft’s AI imbalance: Microsoft’s AI spending vs. adoption numbers show a picture of a tech giant that’s poured tens of billions of dollars into AI every quarter yet still faces questions about whether its AI business can stand on its own. Some critics worry that the firm is too dependent on OpenAI, while its in-house products have struggled to stand out. As of January, it had 15 million paid Microsoft 365 Copilot seats—an increase of 160% year over year, but just 3.3% of the 450 million total Microsoft 365 subscribers. The AI alibi in tech job cuts: Microsoft is far from the only tech company trimming its workforce while increasing expenditures on AI. There were reportedly over 52,000 tech job cuts in the US so far this year as of March, with AI cited as a key reason. Yesterday, Meta announced it’s eliminating roughly 8,000 roles starting late May and closing 6,000 open roles, citing the cost of its AI investments. And in February, Block slashed around 4,000 jobs—about 40% of its workforce—with CEO Jack Dorsey also explicitly blaming AI. Bottom line: Microsoft is spending like a company determined to win the AI race, which means trying to make cost savings elsewhere. But if all that capex and reshuffling doesn’t result in a self-sustaining AI business, these buyouts could just be the start of more drastic cuts. —WK | 
