Ex-Microsoft PM defends buyout offer to employees, says fewer workers are needed now

Microsoft has offered voluntary exit packages to about 60,000 eligible employees across four countries. Former principal product manager Merill Fernando says leaner, AI-led teams could reduce internal delays.

In Short

• Eligible staff span participating organisations in India, US, UK and Canada
• Packages include financial support and career-planning resources for qualifying staff
• Managed identities adoption accelerated after a breach prompted major security reforms

Microsoft is offering voluntary exit packages to around 60,000 employees as it reassesses its workforce, with a former Principal Product Manager defending the move by arguing that the company needs fewer people to work faster in the artificial intelligence (AI) era. Merill Fernando, who spent six years at Microsoft before leaving three months ago to start his own company, said the software giant has too many organisational layers and internal divisions that slow down work. He acknowledged the impact of job cuts on employees and their families but argued that Microsoft needs to change how it operates to keep pace with AI rivals OpenAI and Anthropic.

“I’ve been on the inside. I’ve seen how things get built. Lots of small orgs. Layers on layers. Silos everywhere,” Fernando wrote in a post on X.

He said Microsoft could introduce technology across its products much faster if teams relied more on AI agents and had fewer organisational hurdles to navigate.

ex-Microsoft PM says company needs fewer workers

Fernando cited Microsoft's managed identities technology as an example of how internal divisions can delay progress. Introduced by the Entra team in 2017, the feature allows applications to authenticate themselves without storing sensitive credentials in code.

He said efforts to get other Microsoft teams to adopt the technology moved slowly because each department had its own priorities and decision-makers. Adoption gathered pace after Microsoft suffered a security breach and introduced its Secure Future Initiative.

“Six years, and a major breach, to get there,” Fernando wrote. He argued that similar rollouts could happen within months in a company that relies more heavily on AI agents.

“Microsoft already has everything else. The customers. The infrastructure. The scale. What it needs is fewer people, leaning hard into agentic work,” he said.

Fernando also argued that Microsoft must change to compete with OpenAI and Anthropic, which he believes are releasing products at a faster pace.

What is a voluntary buyout offer?

Microsoft's new Voluntary Exit Offer (VEO) gives eligible employees the option to leave the company with financial support and career-planning resources. It is available to employees at level 70 and below in participating organisations across India, the US, the UK and Canada.

Microsoft has around 223,000 employees, meaning approximately 60,000 are eligible for the offer. However, this is the number of employees who can consider the package, not the number expected to leave.

Chief People Officer Amy Coleman announced the program in a memo to employees, saying it would give workers considering a career outside Microsoft another option while allowing teams to adjust staffing according to business needs.

The offer is voluntary and time-limited. Not every Microsoft department is participating, as eligibility depends on individual teams' priorities, customer commitments and workforce requirements.

Will all employees leaving Microsoft receive compensation?

No. Microsoft's financial package is linked to its voluntary exit offer and is not an automatic payment for every employee who leaves the company.

Employees must be eligible for the programme, work in a participating organisation and choose to accept the offer to receive the associated benefits. Those who resign outside the scheme are not automatically entitled to the VEO package. The company's memo confirms financial support and career-planning resources but does not provide a detailed breakdown of the payout for every employee.

The latest program follows Microsoft's earlier voluntary retirement offer, which was aimed at retirement-age employees. More than 30 percent of the roughly 8,750 eligible employees accepted that offer, according to Bloomberg.

Microsoft expects fewer employees to accept the latest program than the earlier retirement offer. The company has also reduced its workforce through layoffs in recent years while increasing spending on AI and data centres. Its headcount remained largely stable from 2022 to June 2026, even as investment in AI infrastructure increased.

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