1 in 4Microsoft staff have been offered money to leave, in the year it made a record US$134 billion profit. Record profits no longer protect your job.

Source: GeekWire (2026); Microsoft (2026)

You were told the safe job is at a big, profitable company. Microsoft is about as big and profitable as companies get. On 26 October 2026 it offered about 60,000 of its 223,000 staff money to leave, just three months after reporting its biggest profit ever, and days before its next results. If a company that rich wants fewer people on the payroll, your employer’s profits are not your safety net.

How it works

Microsoft’s boss Satya Nadella explained the logic himself. In a July 2025 memo, after thousands of layoffs, he wrote that “by every objective measure, Microsoft is thriving”, that “we’re investing more in CapEx than ever before”, and that “at the same time, we’ve undergone layoffs.” He called it “the enigma of success in an industry that has no franchise value.” In other words, past wins protect nobody. The enigma has a simple answer: like its peers, Microsoft is under pressure from Wall Street to hold down operating costs while it spends tens of billions on datacentres. Staff are the cost it can cut.

Microsoft says it in its own words

• The workforce is shrinking for the first time in a decade. Microsoft’s annual filing says it had about 223,000 full-time staff at 30 June 2026, down from 228,000 a year earlier. That was before the July layoffs.
• The cuts keep coming. More than 15,000 jobs went in 2025. In spring 2026, about 30% of 8,750 eligible US staff took its first-ever early-retirement buyout. Then 4,800 jobs went in July, and hundreds more in September.
• Now about 60,000 people have been offered money to leave. That’s GeekWire’s count. The Voluntary Exit Offer covers staff at level 70 and below on participating teams in the US, Canada, the UK and India. Age, tenure and performance don’t matter. They have until early December to decide. The package is Microsoft’s standard severance, Microsoft says it expects far fewer than 30% to accept, that the offer isn’t a sign it needs fewer people, and that it isn’t a replacement for layoffs. Layoffs stay on the table either way.
• Australians have already been caught. Australia isn’t part of this offer, but about 100 Australian roles went in Microsoft’s May 2025 cuts, and nearly 120 more were expected in July 2025, HR Leader reported.

The money is going to machines, not people

In the year to June 2025, Microsoft spent US$64.6 billion on property and equipment, mostly datacentres. In the year to June 2026 it spent US$115.9 billion. Profit rose 31%, or 22% on Microsoft’s own underlying measure. Staff numbers went down. A US employment lawyer told Fortune in April that a buyout lets an employer cut staff without having to say anyone is underperforming. Microsoft’s staff are doing needed jobs, she said, “maybe at prices that are too high.”

The same thing is happening here. In April, Microsoft promised A$25 billion for Australian AI infrastructure by the end of 2029, to grow its Australian datacentre footprint, now 29 sites, by more than 140%. It also pledged to train 3 million Australians in AI skills. Most of the money buys buildings, chips and power, not payroll. Big employers here are making the same bet, and the same trade-off.

The fix: don’t be the easy cut

You can’t stop a company spending its profits on datacentres. You can make sure a cut costs you less, and costs your boss more. That means three things: know exactly what you’re owed, have someone in your corner before the meeting, and build a skill that doesn’t depend on one employer.

Do this today

• 1. Work out your redundancy pay. Count your years of continuous service, then check the Fair Work table and your award. Write the number down.
• 2. Join the union for your job before any restructure is announced.
• 3. Check if you can get Free TAFE in your state, and pick a skill that has to be done in person, here.

For why the youngest workers are being hit first, read how AI is sawing off the bottom rung of the career ladder.

Go deeper

• Empire of AI by Karen Hao. The inside story of OpenAI, Microsoft’s AI partner, and of what the AI race takes to feed it.
• A World Without Work by Daniel Susskind. An Oxford economist on what happens when machines can do more of the work.

What to make of it

Microsoft isn’t cutting because it’s struggling. It’s cutting because it’s winning. The profit is real, the spending on datacentres is real, and so are the 60,000 offers. Every big employer is watching which bets pay off. Don’t wait to find out whether yours is copying Microsoft. Know your number, get backup and build a second skill this week.

Sources

1. Microsoft (2026): Introducing a Voluntary Exit Offer
2. GeekWire (2026): Microsoft makes new voluntary exit offer to more than a quarter of its workforce, including some execs
3. Microsoft (2026): FY26 Q4 press release
4. Microsoft (2025): FY25 Q4 press release, filed with the SEC
5. Microsoft (2025): Satya Nadella, Recommitting to our why, what, and how
6. HR Leader (2025): Aussie-based workers caught in Microsoft’s AI job slash
7. Microsoft (2026): Microsoft deepens commitment to Australia with A$25 billion investment
8. Fortune (2026): Why did Microsoft do buyouts instead of layoffs?
9. Fair Work Act 2009, section 119: Redundancy pay
10. Fair Work Ombudsman: Redundancy pay and entitlements
11. Fair Work Ombudsman: Redundancy
12. ABS (2024): Trade union membership, August 2024
13. Professionals Australia: The Tech Unions
14. DEWR: Free TAFE

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This article is general information and analysis, not legal or financial advice. Follow the sources to form your own view.