Here's how much Microsoft's buyout program will cost

Microsoft's workforce will shrink in the next year, likely driven by the company's recently announced voluntary retirement program.

Those buyouts, which will be formally offered in about a week, will cost the company roughly $900 million, Microsoft Chief Financial Officer Amy Hood said in a Wednesday earnings call with analysts.

Microsoft announced the retirement program last week, telling employees that it was a one-time offer for U.S.-based employees. Out of the company's 125,000 employees in the U.S., roughly 8,750, or 7%, will be eligible.

Microsoft had 228,000 employees globally as of June.

It's the first time in Microsoft's 51-year history that the company has offered buyouts at this scale.

Amy Coleman, Microsoft's chief people officer, said in a memo to employees last week that the offer is available to those at the senior director level and below. Eligible employees will be those whose number of years at the company plus their age equals 70.

"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Coleman said in the April 23 memo.

As employees will decide whether to take Microsoft's offer in May, the $900 million charge will affect Microsoft's profitability for the current quarter, which ends on June 30. The charge is a fraction of Microsoft's quarterly profit, which was $31.8 billion for the first three months of the year.

The buyouts are the latest step Microsoft is taking to manage its head count, as it shifts priorities and hundreds of billions of dollars toward artificial intelligence investments.

Microsoft also went through significant rounds of layoffs last summer, ultimately letting go of 15,000 employees companywide.

The company's efforts to reduce its workforce is showing results. Hood said during the earnings call Wednesday that Microsoft's total head count declined this past quarter year-over-year, as we focus on building high-performing teams that operate with pace and agility.

Microsoft, like other corporations enacting layoffs over the past year, keeps pointing toward the need for speed and efficiency as it chases AI ambitions. But the company has also acknowledged that rising capital expenditure costs are also driving workforce reductions. Hood said Microsoft will spend $190 billion this calendar year on data centers and high-powered computer chips, with an emphasis on the latter as demand for AI outpaces supply.

The effect of last year's layoffs, coupled with the retirement program, will continue to shake out in future earnings reports. Hood said Microsoft's head count will continue to shrink during the company's 2027 fiscal year, which begins on July 1. She did not say Microsoft will implement more layoffs.

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This story was originally published April 30, 2026 at 4:51 PM.