Microsoft has extended voluntary buyout offers to approximately 60,000 employees, a move the company says balances its costly artificial intelligence infrastructure buildout with a need for capital efficiency. The software maker announced the new voluntary exit offer on Monday for certain workers in the United States, Canada, India and the United Kingdom at its experience level of 70 or below.

According to a person familiar with the matter who asked not to be named while discussing an internal issue, the effort affects about 27% of Microsoft's total workforce of 223,000 people. The initiative targets roles up to the vice president level, a higher tier than the company's previous voluntary retirement program, which was limited to senior director level and below.

Microsoft has been ramping up spending on data centers to accommodate high AI computing demand while supplying cloud services to Anthropic, OpenAI and other companies. This expansion has placed strain on the company's finances. In April, Microsoft introduced a first-ever voluntary retirement program for which around 7% of U.S. employees were eligible. In July, the company announced plans to lay off 4,800 employees.

Amy Coleman, Microsoft's executive vice president and chief people officer, wrote in a memo to employees that the Voluntary Exit Offer reflects an evolving approach to change, aiming to create greater flexibility and more ways for employees to shape their next chapter. Coleman noted that this builds on lessons learned earlier in the year through the Voluntary Retirement Program.

Financial results for the second quarter showed that while cloud rivals Alphabet and Amazon reported negative free cash flow, Microsoft generated $19.64 billion in positive free cash flow for the period. However, this figure represents a 23% year-over-year decline. Employees must decide whether to accept the new offer in December, with participating employees leaving on Dec. 31.

The person briefed on the plan stated that some marketing, sales and engineering teams have decided not to participate in the new buyout. Microsoft does not have a specific target number in mind for this initiative. In July, the company reported that over 30% of those eligible for the previous voluntary retirement program chose to participate.

Microsoft is scheduled to report its third-quarter results on Wednesday.