More than 90,000 tech workers have been laid off this year. But here’s why companies like Microsoft are offering voluntary buyouts instead

It’s been a tough year for tech workers. Some 92,000 employees have been laid off from tech companies as they look to cut overhead costs and invest heavily in AI. 

Meta announced on Thursday that it plans to cut 10% of workers, or roughly 8,000 employees, to improve efficiency and offset its AI spending. The social media giant also plans to leave 6,000 open roles unfilled.

Microsoft also announced on Thursday plans to slash its workforce, but is taking a different approach: its first ever buyout for experienced workers. The company is offering voluntary separation to 7% of its U.S. workforce—more than 8,500 employees—whose years of service plus age total 70 or more. 

In the past, Microsoft hasn’t been shy about laying off employees and cut 15,000 jobs last year. But management is jumping on an increasingly common trend of offering voluntary separation instead of laying people off, said Domenique Camacho Moran, a lawyer and partner at employment law firm Farrell Fritz. Her firm represents Fortune 500 companies, large universities, and several middle market businesses. 

A buyout is a way to support good and loyal workers and avoid the devastating blow of being laid off while ultimately cutting jobs. By contrast, layoffs can be more complicated, requiring an evaluation of each employee’s skill set and performance to avoid litigation risk, Moran said.

“The voluntary exit option gives the employer the ability to say, ‘it’s not about the fact that we don’t think you’re doing a good job, but if you’re thinking about it’s time for me to move on. I’m going to incentivize you to do that because we need to cut some staff,’” she said. 

The growing popularity of buyout speaks to businesses deciding they need fewer employees because of AI and financial pressures, according to Moran. 

Microsoft is expected to invest $145 billion in capital expenditure this fiscal year as part of a $700 billion wave in capital expenditures for 2026 from big tech companies racing to take the lead in AI.

“What they’re trying to do is make sure that they work more leanly and efficiently,” Moran said of Microsoft. “They have figured out that the people they have are the people who are doing jobs they need, maybe at prices that are too high.”

Microsoft declined to comment about the buyouts.

The employee’s choice

For those at the opposite end of buyouts, they can be attractive to employees looking to transition, under-performers who fear getting fired, or people who think they can get another good job, she said. Employees can leverage waiting periods to find a different job before deciding to leave on their own terms. 

“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” Chief People Officer Amy Coleman wrote in the memo to employees on Thursday. Eligible Microsoft employees and their managers will receive details on buyout plans on May 7, and workers with sales incentive plans cannot participate.

Some companies say the quiet part out loud. Last year, Google offered buyouts to U.S. employees on specific teams, including its unit that runs Google’s search, ads, and commerce divisions—and explicitly said it was an opportunity for underperforming employees to ramp off. 

“I want to be very clear: If you’re excited about your work, energized by the opportunity ahead, and performing well, I really (really!) hope you don’t take this! We have ambitious plans and tons to get done,” Google senior vice president Nick Fox wrote in a memo, CNBC reported. “On the other hand, this VEP offers a supportive exit path for those of you who don’t feel aligned with our strategy, don’t feel energized by your work, or are having difficulty meeting the expectations of your role.”

This story was originally featured on Fortune.com