On October 26, 2026, Microsoft reportedly announced a voluntary buyout program for approximately 60,000 eligible employees, representing more than a quarter of its global workforce. The program reportedly includes eligible employees in Canada, the United States, the United Kingdom and India.
According to Reuters, the offers are part of Microsoft’s efforts to control costs while increasing investment in artificial intelligence. Participating business areas reportedly include Xbox, Windows and Devices, Copilot, finance and human resources.
The voluntary exit packages reportedly include compensation based on an employee’s length of service and position, continued stock vesting, healthcare benefits and career transition support. According to GeekWire, eligible employees have until the first week of December 2026 to decide whether to accept the offer.
Although approximately 60,000 employees are reportedly eligible, this does not mean Microsoft is laying off 60,000 employees. Participation is voluntary, and the number of employees who will accept the packages has not been confirmed.
What Microsoft’s Voluntary Buyouts Mean for Ontario Employees
Microsoft employees in Ontario who receive a voluntary exit offer should carefully review the terms before accepting.
Unlike an involuntary termination, accepting a voluntary buyout may affect an employee’s ability to claim additional severance or termination compensation. Employees should understand what rights they may be giving up, particularly if the offer requires signing a release of claims.
The compensation offered under a voluntary exit program may not reflect what an employee could otherwise be entitled to if their employment were terminated without cause.
Monkhouse Law’s employment lawyers can help Ontario employees review voluntary buyout packages, assess their potential severance entitlements and understand their options before signing an agreement.
September 22, 2026: Microsoft Announces Additional Job Cuts
On September 22, 2026, Microsoft reportedly announced further workforce reductions affecting fewer than 600 employees globally, including 268 positions across Xbox Game Studios and related operations.
The reductions reportedly affected several business areas, including gaming, cloud computing, artificial intelligence and research. According to GeekWire, the cuts continued Microsoft’s restructuring efforts following earlier layoffs in July.
Microsoft also reportedly confirmed the elimination of 268 Xbox-related positions in an official announcement.
July 2026: Microsoft Announces Thousands of Layoffs
In July 2026, Microsoft reportedly announced workforce reductions affecting approximately 3,200 positions within its Xbox gaming division worldwide. The cuts reached Canada, with 12 employees laid off at Bethesda Game Studios in Montreal (CTV News).
April 2026: Microsoft Offers Voluntary Buyouts
On April 24, 2026, reports indicated Microsoft offered voluntary buyouts to approximately 7% of its workforce as part of ongoing restructuring efforts tied to increased investment in artificial intelligence and cloud infrastructure, including large-scale data centres required to support AI systems and services (The Guardian, CBC News).
Unlike traditional layoffs, these buyouts were voluntary, allowing eligible employees to decide whether to accept an exit package.
July 2025: Microsoft Cuts Approximately 9,000 Jobs Worldwide
On July 2, 2025, Microsoft eliminated approximately 9,000 roles globally, about 4% of its workforce, in its largest round of layoffs since 2023. Although the company did not release a country-by-country breakdown of affected employees, Microsoft’s substantial operations in Canada raised concerns about the potential impact on Canadian workers.
At the time, Microsoft employed over 5,300 full-time staff across 11 offices in Canada, with its Canadian headquarters in Mississauga, Ontario (Microsoft).
Microsoft stated that the job cuts were designed to streamline management layers and redirect resources toward AI investments and cloud services. The July layoffs targeted divisions such as Xbox gaming, customer support, sales and mixed reality teams (Global News, TechCrunch, Reuters).
Further reporting described significant cuts across Microsoft’s gaming division, including Xbox, ZeniMax, King and Turn 10 Studios. Entire projects were cancelled, including Perfect Dark and Everwild, and The Initiative game studio was closed as part of the restructuring.
At the same time, Microsoft began restructuring its sales and marketing teams, phasing out some traditional sales roles in favour of more technical solutions engineering positions. An internal memo revealed that the company was consolidating six sales solution areas into three as part of its strategy to position itself as a “Frontier AI” company (Business Insider).
May 2025: Microsoft Announces 6,000 Layoffs
The July 2025 layoffs followed Microsoft’s May 13, 2025 announcement that approximately 6,000 employees, or 3% of its workforce, would be laid off. Together, the May and July announcements brought the total number of jobs eliminated in 2025 to approximately 15,000, with significant reductions affecting gaming, sales and support roles (Global News, Reuters).
Severance Packages for Microsoft Employees
If you’ve been laid off in Canada, you may be entitled to severance. Under Canadian employment law, severance pay depends on several factors, including:
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- Length of service
- Age
- Position
- Availability of similar employment
Microsoft is required to provide fair severance packages to Canadian employees. However, initial offers may not always reflect what employees are legally entitled to. Monkhouse Law can help ensure you receive the compensation you deserve.
Wondering what you’re owed? Use our Severance Pay Calculator to quickly estimate your entitlement based on your age, tenure, and role.
Potential Issues with Layoff Notices
Layoff notices from Microsoft may not always comply with Canadian employment laws. Common issues include:
- Insufficient notice periods
- Improper classification of terminations (e.g., “temporary layoffs” that function as terminations)
- Severance offers that don’t align with your legal entitlements
Wrongful Dismissal and Microsoft Layoffs
If your termination was handled improperly or you were laid off without adequate notice or compensation, you might have grounds for a wrongful dismissal claim. Monkhouse Law has successfully represented clients in similar situations, securing fair compensation beyond initial severance offers.
A notable example is the case of B. v. Microsoft Canada Inc., 2020 ONSC 4286. Monkhouse Law acted as counsel for a Microsoft executive and successfully argued that Microsoft’s notice plan for limiting share awards was invalid. As a result, the employee received 24 months’ notice and bonuses throughout the notice period.
The court also awarded $120,000 in legal fees to cover the costs of the claim. This decision highlights the importance of reviewing severance and compensation packages carefully and demonstrates Monkhouse Law’s expertise in holding large employers accountable for wrongful dismissal.
How Monkhouse Law Can Help
At Monkhouse Law, we specialize in employment law and have extensive experience assisting employees affected by mass layoffs. We provide:
- Free 30-minute phone consultation to assess your case
- Negotiation services to secure fair severance packages
- Representation in wrongful dismissal claims
Contact Us for a Free Consultation
For those affected by these layoffs, understanding your legal rights is crucial. Employees may be entitled to severance pay or could have grounds for a wrongful dismissal claim if their termination was handled improperly. Monkhouse Law can assist in reviewing severance packages, negotiating fair compensation, and pursuing wrongful dismissal claims.
If you’ve been impacted by Microsoft’s layoffs, don’t navigate this process alone. Schedule a free 30 minute phone consultation with Monkhouse Law today to understand your rights and secure the compensation you deserve.