Microsoft offers voluntary exit to 60,000 employees: What it means for India staff

Around 23,000 people employed by Microsoft in India could see a section of their workforce being offered voluntary exit packages, as the American technology giant has extended a global programme covering approximately 60,000 employees to the country. People in India working in roles across Copilot, AI experiences, Windows and Devices, Xbox, finance and human resources, could be impacted by the move.

Announcing the Voluntary Exit Offer (VEO) on Monday (October 26), Microsoft said the scheme would be available to eligible employees at level 70 and below across participating teams in India, the US, the UK and Canada. Level 70 is an internal hierarchical structuring within Microsoft, and could cover employees with vice-president titles. While the company has not disclosed how many of its India-based employees would be eligible for the scheme, it hires Indians across software engineering, research and development, artificial intelligence, cloud infrastructure, sales, customer support and corporate functions.

“This is a time-limited, voluntary programme that gives those who are eligible the opportunity to leave Microsoft with financial support and career planning resources. Some organisations are providing the Voluntary Exit Offer, and some are not. Participation varies based on each business’s priorities, customer commitments and workforce needs,” Amy Coleman, Microsoft's Executive Vice President and Chief People Officer, said in a blog post.

The development comes amid increasing concerns over AI-led disruptions to employment, particularly in the technology sector, where companies are deploying AI tools to automate tasks traditionally performed by human workers. Several major technology firms have announced workforce reductions, hiring slowdowns and organisational restructuring in recent months, with some explicitly citing productivity gains from AI. While the technology is creating demand for new skills and specialised roles, its growing adoption has also raised questions about the future of conventional software development, customer support and other white-collar jobs. Microsoft, however, has not explicitly attributed its latest voluntary exit programme to AI replacing human workers.

Impact on Microsoft’s Indian workers

Microsoft's decision to offer voluntary exit packages to around 60,000 employees globally could also affect a section of its workforce in India, where the American technology giant employs approximately 23,000 people. A senior industry source said not all roles will be impacted, and those that receive an email from the company about their eligibility to participate in the voluntary exit scheme would have until December 1 to decide.

The programme will cover employees at Microsoft's internal level 70 and below, including certain senior executives, but only in participating business divisions. It is understood that employees in divisions such as Copilot, AI experiences, Windows and Devices, Xbox, finance and human resources are among those eligible. This means that not all Microsoft employees in India will receive the offer, with eligibility depending on the business division to which they belong.

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A significant part of Microsoft's India operations is its India Development Center (IDC), one of the company's largest research and development facilities outside its headquarters in Redmond, Washington. With operations in Hyderabad, Bengaluru and the National Capital Region, the centre develops technologies for Microsoft's global businesses, including Windows, Azure, Microsoft 365 and AI products. Its Indian teams also contribute to Copilot Studio, Azure AI Search, AI agents, speech and translation technologies and machine learning platforms.

For Indian employees, the voluntary exit package is understood to be broadly similar to Microsoft's standard severance arrangements, including one month's base salary for every completed year of service, along with health insurance and career transition assistance. Eligible employees in India will have until December 1 to decide whether to accept the offer, with departures expected by the end of December. However, the company has not publicly specified how many employees in India it expects to take up the scheme.

The move comes as Microsoft seeks to reorganise its workforce while significantly increasing investments in artificial intelligence infrastructure, with the company stating that its India plans remain unchanged.

“Microsoft continues to invest in India’s talent and technology ecosystem and is backing the country’s AI ambitions with $20.5 billion in committed investment between 2025 and 2029 across cloud and AI infrastructure, skilling and operations. We are also on track to fulfil our commitment of equipping 20 million people across India with AI skills by 2030,” a Microsoft spokesperson said in a statement.

The programme could also have implications for Indian technology professionals employed by Microsoft in the US, particularly those working on H-1B visas. While the company has not clarified how the scheme would apply to foreign workers on temporary visas, employees choosing to exit without securing alternative employment could face immigration-related challenges. Unlike US citizens, H-1B visa holders are generally required to find another sponsoring employer, change their immigration status or leave the country within an applicable grace period, typically up to 60 days following termination of employment. These concerns come amid tightening US immigration regulations and greater scrutiny of employment-based visa and permanent residency programmes.

AI-led job disruptions

Microsoft's move comes amid a broader restructuring of workforces across the global technology industry, with several companies either reducing their headcount or slowing hiring as AI tools take over tasks previously performed by employees. While some companies have explicitly linked job cuts to AI-driven productivity gains, others have cited the need to redirect resources towards AI investments and reorganise their operations.

One of the most prominent examples came in February 2026, when Block, the financial technology company founded by Twitter co-founder Jack Dorsey, announced plans to cut more than 4,000 jobs, nearly half its workforce. Dorsey directly attributed the decision to improvements in AI tools, saying that smaller teams could now accomplish significantly more work. In September 2025, enterprise software company Salesforce disclosed that it had reduced its customer support workforce from around 9,000 to 5,000 employees as AI agents increasingly handled customer queries. CEO Marc Benioff said the company needed fewer people for these functions.

In India, home interiors platform Livspace laid off around 1,000 employees, or approximately 12% of its workforce, in February 2026 as it shifted towards an AI-led operating model. The Bengaluru-based company's restructuring affected employees across design, sales, operations and marketing. Livspace said it was integrating AI agents and automation across these functions, reducing the need for certain manual roles. Earlier, in 2023, Indian e-commerce startup Dukaan had attracted controversy after its founder announced that the company had replaced 90% of its customer support team with an AI chatbot.

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India's larger IT services industry has also faced pressure to reorganise its traditional labour-intensive business model. In July 2025, Tata Consultancy Services (TCS), India's largest IT services company, announced plans to reduce its workforce by around 12,000 employees, primarily in middle and senior management positions. While the company cited skill mismatches and changes in business requirements, the announcement came amid increasing adoption of generative AI in software development, testing and maintenance. However, TCS did not directly attribute the job cuts to AI replacing workers.

There have also been instances of companies reversing or moderating their reliance on AI. Swedish fintech company Klarna, which had earlier said its AI assistant could handle work equivalent to 700 customer service agents, subsequently moved to recruit human support staff again after acknowledging that customers continued to require human assistance, particularly for complex problems.

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