Microsoft offers exit packages to 60,000 staff, India included

The News

Microsoft has put a voluntary exit offer in front of roughly 60,000 employees across the United States, the United Kingdom, Canada and India, according to reporting by The Verge. It is the largest such offer the company has made, and it dwarfs a retirement scheme earlier this year that was open to only about 9,000 staff.

Microsoft employed around 223,000 people as of 30 June, down from 228,000 in 2025 and the first year-on-year fall in a decade, so the offer reaches close to a quarter of the company.

Staff reportedly have until December to decide. More than 30 percent took the earlier retirement offer, but take-up should be far lower this time because the terms are said to mirror standard severance. Even a 5 percent acceptance rate would mean about 3,000 departures.

Why It Matters

The move follows a layoff of 4,800 people only months ago, which fell hardest on Xbox and commercial sales, and a 4 percent workforce cut in July last year. The stated logic is to protect spending on AI infrastructure by trimming operating costs and headcount. Satya Nadella has been unusually candid about the trade-off, saying almost two years ago that total people costs would fall while cost per head and GPU capacity per researcher would rise.

The comparison worth making is January 2023, when Microsoft announced 10,000 job cuts as the post-pandemic boom faded. That round was framed as belt-tightening after over-hiring. This one is different in kind: the company is profitable and growing, and is choosing a smaller, more expensive and more heavily tooled workforce as its long-term shape. A successful voluntary programme at this scale would hand other large employers a template that avoids the reputational cost of forced redundancies.

Indian Angle

India is one of only four countries named, which makes this directly relevant to Microsoft's engineering and sales teams in Hyderabad, Bengaluru and Noida. Microsoft has not said how the 60,000 are split by country, and local labour law, notice periods and gratuity rules will shape what Indian staff are actually offered.

Tax is the practical sting. Restricted stock that vests early on exit is generally treated as a salary perquisite in India and taxed at the slab rate in the year of vesting, so a large accelerated tranche can push an employee into a higher effective bracket. Get a written computation from HR and run it past a chartered accountant before December.

A flow of experienced Microsoft talent is good news for Indian AI startups such as Sarvam and Krutrim, and for global capability centres short of senior cloud and AI engineers. It is also a warning for mid-career technologists: if one of the world's most profitable software companies is shrinking headcount to fund GPUs, Indian IT services firms and GCCs will face similar pressure on roles AI tools can absorb.

FAQ

Who is eligible for the Microsoft exit offer?

According to The Verge, the Voluntary Exit Offer has gone to roughly 60,000 Microsoft employees across the US, the UK, Canada and India. That is close to a quarter of a workforce that stood at around 223,000 on 30 June.

When do employees have to decide?

Eligible employees reportedly have until December to accept or decline. The final take-up will therefore not be known for some weeks, and The Verge reports rumours of further layoffs in November and January, which could be sized partly around how many people choose to leave voluntarily.

How generous is the package?

Sources cited by The Verge describe it as practically the same as Microsoft's regular severance: cash linked to years of service, accelerated stock vesting, some extra subsidised health cover and several months of career services. That is why take-up is expected to be well below the 30 percent-plus seen on the earlier retirement offer.

What should an Indian employee check before accepting?

Ask HR for the written breakdown of the cash component, any notice-period pay and gratuity, and how unvested stock will be treated. Shares that vest early are typically taxed as a salary perquisite in the year they vest, so the tax bill can arrive with the exit. A chartered accountant can confirm whether any part qualifies for a concessional or exempt treatment.

This story was reported by The Verge. Read the full original coverage at The Verge.