Within an hour of Microsoft’s announcement of buyouts last week, employees rushed to an internal site to see whether they had been offered one. So many people were checking at once that employees speculated on the company’s internal social network that the site had buckled under the traffic.
The offer, extended to about 60,000 employees, or more than a quarter of Microsoft’s work force, was the largest in the company’s history. It was also the company’s second buyout this year, and another shock to a work force grappling with big changes brought on by artificial intelligence.
For years, Microsoft occupied a distinct position among the tech industry’s biggest companies. While its pay packages often lagged behind Silicon Valley rivals like Google and Meta, employees said, the company countered with strong benefits and a reputation for stability. As recently as September, Forbes ranked Microsoft the world’s best employer for the third straight year.
But the tech industry’s A.I. race is upending many workplaces, Microsoft included. The buyout offer, said six Microsoft employees who spoke on the condition of anonymity, landed on workers strained by mounting expectations to use A.I., stagnant pay and a growing sense that their jobs were no longer secure.
Though Microsoft is doing better financially than most of its peers, it is clearly shifting its spending priorities. Two days after the buyouts were announced, the Redmond, Wash., company reported a 32 percent jump in quarterly profit, to $36.6 billion, on revenue of $92.3 billion. Its capital spending, largely on data centers, rose 30 percent to $45.2 billion, and the company said it expected to spend roughly $170 billion this year.
The fear among many workers now is what comes next, and some have begun organizing. Before the buyout offer, a group of current and former employees circulated an open letter among colleagues accusing the company of pursuing A.I. with a “speed-at-all-costs” ethos. It called on Microsoft to involve employees in decisions about how A.I. is built and used, and to stop tying A.I. use to rewards or reprimands.
Amy Coleman, Microsoft’s executive vice president and chief people officer, said the buyouts were meant to give employees who might be ready for something new “choice and agency.” She said the buyouts were not related to how A.I. was changing work. (A Microsoft spokeswoman said “maintenance timing,” rather than a traffic surge, had briefly delayed the release of some buyout offers on the internal site.)
Ms. Coleman also did not rule out future layoffs.
Employees offered a buyout have until Dec. 9 to decide, and those who accept will leave on Dec. 31. They will receive a minimum of eight weeks of base pay, and the size of the payment varies by job level and tenure.
The offer followed a string of cuts that had already shaken employees. Microsoft laid off 10,000 workers in 2023, and more than 15,000 in 2025. This spring, about 8,600 U.S. employees were offered a retirement-age buyout, and about 30 percent accepted it. This summer, the company cut about 4,800 more jobs. Microsoft’s head count in June was 223,000, down 5,000 from a year earlier.
This time, Microsoft said it expected less than 5 percent of the 60,000 employees offered a buyout to take it.
Some employees have already signed the offer, including one who has been at Microsoft for nearly a decade. She was her family’s main earner and worried about the job market, she said. But years of pressure to use unreliable A.I. tools, the constant threat of layoffs and what she saw as a widening gap between the company’s stated values and its actions made staying feel worse. Colleagues urged her to stay, she said, because they would have to absorb her work.
Others are staying, at least for now, some by choice and some because they feel they have none. A senior software engineer who has worked at Microsoft for more than five years said he wanted to stay to try to improve the company. He said a recent squeeze on pay, the push to use A.I. and now the buyouts had left far more of his colleagues feeling expendable.
Several employees said that merit raises this year had been unusually small, in some cases less than 1 percent, and that managers had described rewards budgets as tight. At a company town hall last month, a question about how executives balanced spending more than $100 billion a year on A.I. against flat rewards for the workers carrying out that strategy drew more than 80 reactions, roughly twice as many as most other questions seen by The New York Times.
Ms. Coleman said Microsoft was trying to stay competitive on pay while it remained “a company that has to think about our operating expense and our capital expense.”
The tension had begun to show up in pay in other ways, too, employees said. Gretchen Thomas, 57, a design leader, left Microsoft in September after five years because the pressure grew steadily heavier, she said, including shifting priorities and faster deadlines.
“I just can’t believe how grim it’s gotten just in the last three years,” she said.
This year, Ms. Thomas’s raise and bonus were in line with those of her colleagues. But her manager had reduced her stock award, typically the most valuable part of a Microsoft employee’s pay, because, according to a memo seen by The Times, she did “not consistently” show speed, urgency and willingness to experiment, including with A.I.
Ms. Coleman declined to discuss individual pay decisions, but said the company encouraged employees to experiment and use its tools. “Of course some of that includes A.I.,” she said.
For those who stay, employees said, the bigger worry is the work left behind. All of the employees said that they did not expect departing colleagues to be replaced, and that the remaining staff would absorb their work. Ms. Coleman said Microsoft had thousands of jobs open but acknowledged the company needed to make “some shifts in the work force.”
(The Times has sued Microsoft and OpenAI, claiming copyright infringement of news content related to A.I. systems. The two companies have denied the suit’s claims.)
The day after the buyout announcement, a group of teams in one of Microsoft’s software organizations gathered at a Dave & Buster’s for an event to raise morale that had been planned for a month.
Before the food came out, a five-year engineer who was at the event recalled, a manager stood on a chair, acknowledged that all the attendees were refreshing their email and weighing the buyout offer, and urged them to set it aside and celebrate the work they had done.
At his table, the engineer said, no one talked about anything else.
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