Microsoft expects 3,000 or fewer employees to accept the buyout it offered this week to more than a quarter of its workforce, a spokesperson told Business Insider.
The point was reiterated on Wednesday by Chief Financial Officer Amy Hood, who wrote in an internal memo that employees have been questioning the rationale behind the buyout.
“I know there have been some questions on the rationale behind the voluntary exit offer that we announced this week,” Hood wrote. “Our intent is to offer employees agency if they choose to leave the company on their own terms. We expect very few people to select this offer because of the growth opportunities here at Microsoft.”
The memo statement was part of a quarterly earnings email Hood typically sends internally to employees every quarter when Microsoft discloses its financials.
These memos mostly repeat what the company reports publicly, but this time Hood went out of her way to address the buyout offer, which caused quite a stir across the tech industry this week.
Earlier this year, Microsoft offered a different retirement buyout. In that situation, about one-third of eligible employees took the offer, and that helped Microsoft cut fewer employees in subsequent layoffs.
This week’s buyout is getting a lot less uptake, according to the company.
Read the CFO’s full memo
Team,
This afternoon, we announced our first-quarter financial results. We exceeded Wall Street expectations, growing revenue 19% and operating income 21%.
With the start of FY27, we also made an important change to how we report our business. We announced that we changed our reporting structure for the first time in 12 years, moving from three segments to two: Agents and Infra, and Devices and Consumer. This change better reflects how we are running the business today — from how we build products and allocate resources to how we create value for customers across the connected layers of our platform. To give you a sense of the two segments, looking back to last fiscal year, Agents and Infra would have represented about 81% of our revenue while Devices and Consumer would have been 19%.
A few highlights from the quarter across our two new segments:
- Agents and Infra grew revenue 23% this quarter
- Microsoft Cloud revenue was $63.9 billion and accelerated to 30%.
Azure revenue increased 48% reflecting accelerating Foundry demand. - Microsoft 365 commercial cloud revenue increased 18% in constant currency driven by growth in our premium seat offerings like Copilot and E7 as well as usage-based services across M365 Copilot and GitHub Copilot.
- Microsoft 365 commercial seats increased 5% and the number of customers with more than 50,000 M365 Copilot seats increased 8x year-over-year.
- Microsoft 365 consumer cloud revenue increased 17% with subscriber growth of 7%.
- Industry solutions cloud revenue increased 10% with growth in Dynamics 365 and LinkedIn Talent Solutions.
- Devices and Consumer declined 3% this quarter
- Search and advertising revenue ex-TAC increased 12%, with growth across LinkedIn, Bing, and Edge.
- Windows OEM and devices revenue decreased 22%, reflecting the prior-year benefit from Windows 10 end of support, inventory drawdowns by OEM partners, and weaker PC market demand.
XBOX content and services revenue decreased 2%. Last week, we launched Call of Duty: Modern Warfare 4, as we continue to bring great games to more players across more devices.
Thank you for everything you did to deliver a strong start to the year. In particular, I want to thank our engineering and capacity delivery teams who are working to help us deliver more capacity faster and with high reliability. These teams are also using the capacity we have more efficiently to create room for us to better meet customer demand for the Azure platform, which continues to exceed our supply.
I know there have been some questions on the rationale behind the voluntary exit offer that we announced this week. Our intent is to offer employees agency if they choose to leave the company on their own terms. We expect very few people to select this offer because of the growth opportunities here at Microsoft. We’ll continue to provide a broad set of options for employees to learn, gain new skills, and advance their careers here.
We have tremendous opportunity ahead of us. To meet the moment, we are focused on delivering great products and solutions that help our customers to achieve their many goals — security, innovation, growth — to name a few. Thank you for keeping positive, value-creating outcomes for our customers at the top of the list.
To hear more details about the quarter and our outlook for Q2, you can join live today at 2:30PM Pacific Time, listen on-demand, or read the transcript on the Investor Relations website. Finally, mark your calendars for Microsoft Ignite, on November 17-20, where we’ll show how our innovation across AI, cloud, data, security, and Copilot is coming together to help customers transform their businesses.
With appreciation and gratitude,
Amy
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