On October 26, 2026, Microsoft offered a voluntary exit program, the "Voluntary Exit Offer (VEO)," to about 60,000 employees in the United States, Canada, India and the United Kingdom. Those eligible represent roughly 27% of all employees as of the end of June 2026. However, 60,000 is the number of people eligible to apply, not the number who will actually leave. In April, Microsoft ran a voluntary retirement program, the "Voluntary Retirement Program (VRP)," and the company itself disclosed that more than 30% of those eligible took part. If uptake this time is similar, about 18,000 people would leave. However, the eligibility conditions differ between the two programs, and how many people will actually leave is not known at this point.
About 60,000 eligible; limited disclosure of participating units and exit terms
The program was revealed in a memo to employees from Microsoft's Chief People Officer, Amy Coleman. The company published a partially redacted version of the memo on its official blog. The VEO is a time-limited voluntary exit program for employees at Level 70 and below in eligible units in Canada, India, the United Kingdom and the United States. Which organizations participate is determined based on business priorities, customer commitments, staffing needs and similar factors. The official memo does not state the total number of eligible employees.
The figure of about 60,000 eligible employees was provided by a Microsoft spokesperson to Business Insider. According to the publication, the sales organization, some engineering groups and some corporate functions are not participating in this program. Severance is said to follow the company's standard terms, but the official memo does not specify the amount or the number of weeks of pay. For reference, the layoffs conducted in the US in July offered severance equivalent to up to 39 weeks of base pay, but there is no basis for assuming the same terms apply to the VEO.
Eligible employees must decide whether to take part by early December, and departures are scheduled for the end of the year. A Microsoft spokesperson told Business Insider that the company has no plans for another exit program following this one.
Japan is not among the four eligible countries, so employees in Japan are not directly covered by this program. However, details on participation by unit and the number of departures have not been disclosed, so it is not possible at this point to judge how business operations in various regions, including Japan, might be affected.
A 30% uptake would mean 18,000 departures, based on the previous program
In a voluntary exit program, the company sets the eligible population and the terms, but whether to actually leave is left to each employee. As a result, even when the number of eligible employees is known, the final number of departures can vary widely depending on uptake. It is difficult for Microsoft, too, to determine the exact number in advance, and the related costs are recorded based on certain estimates.
A useful reference for gauging the scale of the VEO is the VRP carried out in April 2026. That program targeted US employees at Level 67 and below whose age and years of service added up to 70 or more. About 8,750 people were eligible, equal to roughly 7% of US employees at the time. In its earnings report six days after announcing the program, Microsoft said it would record $900 million in related costs for that quarter. The breakdown was $350 million in cost of revenue and $550 million in operating expenses, but the company did not disclose the number of participants it assumed in calculating the costs.
Microsoft later said, in a July 6 memo to employees, that more than 30% of those eligible for the VRP had taken part. Business Insider, citing people familiar with the matter, also reported that about one-third chose to leave, in line with the company's expectations. That uptake rate is a useful reference for estimating how many people might leave under the VEO.
According to Microsoft's annual report (Form 10-K), the number of employees at the end of June 2026 was about 223,000, down 5,000 from about 228,000 at the end of June the previous year. By region, US employees fell from 125,000 to 121,000, and employees outside the US fell from 103,000 to 102,000. Applying different uptake rates to the roughly 60,000 eligible employees and comparing them with fiscal 2026 figures gives the following.
| Uptake rate | Estimated departures | Share of all employees at end of June 2026 | Multiple of fiscal 2026 net decline of 5,000 |
|---|---|---|---|
| 10% | 6,000 | 2.7% | 1.2x |
| 20% | 12,000 | 5.4% | 2.4x |
| 30% | 18,000 | 8.1% | 3.6x |
If uptake is close to the VRP's 30%, departures under the VEO would reach about 18,000. That is roughly 8.1% of all employees at the end of June 2026, and 3.6 times the 5,000 decline during fiscal 2026. In other words, depending on uptake, the number of people leaving by year-end could far exceed last fiscal year's net decline. However, because last year's net decline also reflects increases from hiring and other factors, the two figures do not mean the same thing.
This estimate also matters for thinking about the fiscal 2027 headcount. Microsoft's fiscal 2027 began on July 1, 2026, and in July the company announced layoffs of about 4,800 people, roughly 2.1% of all employees. Because that announcement came after the end of fiscal 2026, it is not included in the decline in employee numbers reported in the fiscal 2026 10-K. If 18,000 people leave under the VEO, then together with the July layoffs, about 22,800 people would be affected by cuts or departures. The actual year-end headcount, however, will also depend on new hiring, natural attrition and other factors. CFO Amy Hood also indicated in April's earnings call that headcount in the next fiscal year is expected to be lower than in the prior year.
Different eligibility conditions from last time, and two indicators for gauging departures
There are limits, though, to applying the VRP's uptake rate directly to the VEO. The earlier VRP required age and years of service to total 70 or more, and was limited to US employees at Level 67 and below. It likely centered on people who had reached a certain age or length of service and could more readily consider leaving with a severance package.
By contrast, the VEO is open to employees at Level 70 and below in eligible units regardless of age or years of service. The eligible countries have also expanded to four, making it a program that covers a broader range of employees than before. In its memo to employees, Microsoft itself said the VEO is a new initiative for the company and that it intends to learn from the experience. Uptake therefore may not match the previous program's, and could fall well below 30%.
If uptake were only 10%, departures would be 6,000, about 2.7% of all employees. That is 1.2 times the fiscal 2026 net decline of 5,000, but far from the 18,000 that would result from 30% uptake. The figure of about 60,000 eligible employees alone should not be taken as confirmation of a large-scale workforce reduction. The 30% uptake used in this estimate is merely an assumption based on the previous program's results and cannot predict the actual number of applicants or departures.
Going forward, the main clues for gauging uptake will be exit-related costs and changes in headcount.
First is the exit-related cost to be disclosed in upcoming earnings reports. For the VRP, which covered about 8,750 people, $900 million in costs was recorded. The VEO, by contrast, covers about 60,000 people, roughly seven times as many. Microsoft has not said when, or in how much detail, it will disclose costs for this program.
If VEO costs come in below the previous $900 million, that could suggest fewer people applied than expected. However, the exit terms and the makeup of eligible employees differ between the two programs, and the per-person cost may not be the same. Even scaling the VRP's cost up by headcount would not allow an accurate estimate of this program's cost or uptake. Rather than judging the number of departures from cost increases or decreases alone, differences in the terms of each program need to be taken into account.
The other indicator is the headcount at the end of June 2027. Using the roughly 223,000 employees at the end of June 2026 as a baseline, and factoring in the roughly 4,800 July layoffs and the number of VEO departures, one can gauge how much the program affected headcount. However, the year-end headcount reported in the 10-K reflects all factors, including hiring increases and natural attrition. Even if the net decline in headcount were limited to about 4,800, equivalent to the July layoffs, hiring could have replaced those who left under the VEO, so it could not be concluded from that alone that few people applied.
The VEO's impact on Microsoft's workforce will depend on how many of the roughly 60,000 eligible employees actually choose to leave. A 30% uptake in line with last time would mean about 18,000, while uptake below 10% would mean fewer than 6,000. The most important thing to watch is whether Microsoft directly discloses the number of applicants or departures. Even without such disclosure, comparing exit-related costs with the fiscal 2027 year-end headcount would allow some sense of the program's scale. Judging the actual uptake rate accurately, however, would require additional information such as hiring trends and exit terms.