‘From an MSP perspective, this isn’t just a workforce adjustment, it’s a signal that Microsoft is accelerating toward an AI-first, efficiency-driven model,’ one CEO of a Microsoft solution provider tells CRN.
Microsoft reportedly plans to offer buyouts to select U.S. employees, with about 7 percent of those employees–totaling up to around 9,000 employees–eligible for this voluntary retirement, and the vendor is also changing some compensation rules.
The buyouts are a first for the Redmond, Wash.-based technology giant and available to U.S. employees who are senior directors or lower, don’t have sales incentive plans and whose years of employment and age add up to at least 70, according to multiple news outlets Thursday.
The news also comes just before Microsoft’s third fiscal quarter earnings report Wednesday, which covers the three months ended March 31.
[RELATED: Microsoft Q2 Earnings: CEO Nadella Defends AI Investments]
Microsoft Voluntary Retirement
CRN has reached out to Microsoft for comment.
As part of employee compensation changes, Microsoft will now have five pay levels instead of nine and stock awards are decoupled from bonuses. The decoupling should allow managers the ability to reward long-term contributors with stock no matter their prior performance rating, according to multiple news outlets.
Corey Kirkendoll, CEO of Allen, Texas-based Microsoft solution provider 5K Technical Services, told CRN in an interview that fewer in-house employees at Microsoft can mean more reliance on its 500,000-member partner ecosystem for working with customers.
“From an MSP perspective, this isn’t just a workforce adjustment, it’s a signal that Microsoft is accelerating toward an AI-first, efficiency-driven model,” Kirkendoll said. The move “creates both pressure and opportunity for MSPs to step up and fill the gap.”
Microsoft has been spending billions of dollars to build out more capacity to meet demands for its artificial intelligence product portfolio. In January, the vendor revealed that it spent $37.5 billion in capital expenditures during the preceding quarter. Microsoft has also partnered with more companies on capacity, including a deal announced earlier this month with Nscale for a project in Norway that was originally meant for OpenAI’s Stargate initiative, according to Bloomberg. Microsoft CEO Satya Nadella said in a post on X earlier this month that the Fairwater data center in Wisconsin is going live ahead of schedule, bringing together hundreds of thousands of GB200 AI chips.
Microsoft could reveal CapEx spending of around $37.2 billion for the latest quarter on Wednesday, $2.6 billion above Wall Street expectations, KeyBanc said in a report Thursday. Wall Street expects $154 billion in CapEx beyond the quarter, $50 billion above the forecast a year ago and more than double the forecast two years ago.
Microsoft elevating channel leader Judson Althoff to the commercial CEO position late last year was part of the vendor’s efforts to free up CEO Satya Nadella to focus on infrastructure and engineering to help with capacity constraints.
Other vendors that have looked to reduce their headcount amid AI investments and component prices rising worldwide alongside supply chain shortages.
Other vendors to conduct or announce layoffs in 2026 so far include Oracle, Amazon, Atlassian, Autodesk and Kaseya.
