5 min readOct 30, 2026 02:28 PM IST First published on: Oct 30, 2026 at 02:28 PM ISTOn October 26, Microsoft announced a Voluntary Exit Offer (VEO) for about 60,000 employees — about a quarter of its workforce — across the United States, Canada, the United Kingdom and India. This appears to be a continuation of its Voluntary Retirement Programme, which was launched in April of this year. The programme was offered to 8,600 employees in the US, and about 30 per cent of the people who were offered early retirement chose to accept it. When taken together, it appears that tech companies, having seen the growing societal backlash against AI, may now be trialling a model where they ask employees to leave on their own terms.Despite the headlines, there is still very little known about how AI is affecting jobs. A July 2026 policy brief from the Stanford Institute for Economic Policy Research found that AI’s effect on overall employment is likely to be small for now. It also finds that since 2022, unemployment amongst the most AI-exposed US workers and the least AI-exposed workers seems to have risen at about the same rate. While there is some evidence that AI may be reducing the hiring of young graduates, there is growing consensus that some layoffs which are being associated with AI are more directly related to the need to free up cash for increasing investments into AI infrastructure being undertaken by tech companies, or to correct over-hiring from the pandemic.AdvertisementTwo different offersThe main story here isn’t quite about the impact of AI on jobs — it’s still too early to tell. The more interesting part of the story is how large tech companies are planning to restructure their workforce. Large layoffs are probably not the best way to go about this — and this can especially be seen through the public backlash that recent announcements for layoffs have been met with. With a lack of clarity on how AI is changing the nature of work, every layoff is being read as a verdict on AI’s impact on the future of work.A voluntary programme is a new way to look at restructuring. This moves the decision from the company to the employee, but the two programmes that have been undertaken are quite different:Voluntary Retirement Program (April): The first programme was offered only to employees in the US, and only to those whose age and years of service added up to 70 or more. In practice, this meant it was aimed at long-serving employees nearing the end of their careers. The terms were also generous, with up to 39 weeks of pay and up to five years of health cover.AdvertisementAlso Read | Reforms 3.0 underline a credibility gap. First, reform the reformerVoluntary Exit Offer (October): The second offer is much broader. It is open to employees at level 70 and below, which includes everyone up to vice president, in participating teams across the US, Canada, the UK and India, and there is no age or tenure requirement. It provides Microsoft’s standard severance package.The two offers are vastly different, and as a result, it is likely that the new offer will not see as much uptake. The company itself only expects a small number of employees, between 3-5 per cent of all employees, to take this offer — based on comparable experiences. Despite that, it is likely that this may generate less public backlash than outright layoffs.An important factor to consider here is that the terms of the voluntary exit favour older employees who have had a longer career with the company, as the severance is dependent upon the years of service. Younger and newer employees are likely to get the short end of the stick. They have the least incentive to leave the company, and staying exposes them to future layoffs.you may likeWhat needs to be doneWhile the overall impact of AI on the workforce is still unclear, it is increasingly apparent that there will be some turbulence. This is because of several factors, such as the cost of AI infrastructure, the correction of over-hiring during Covid19, and internal restructuring between departments. Going forward, we can expect more companies to adopt voluntary programmes to avoid backlash, and each exit under these programmes will be recorded as a personal choice.There is a good opportunity for India to get ahead of the problem. Since 2025, the Periodic Labour Force Survey has published monthly estimates of employment and unemployment, which gives India a strong base to build on. Adding a few questions on how and why people leave their jobs would give policymakers a much clearer picture of these transitions. Large employers could also be asked to report how many people leave by type, so that layoffs can be told apart from voluntary exits, in the same way that New York now asks employers whether automation played a part in their layoffs.While there is broad consensus that AI will change the nature of work, there is considerable debate about how quickly, and for whom. This is a moment when many companies will also be trying to get ahead of these issues by trying new models of restructuring, and it is necessary to try and collect data to map these efforts, which can then be used to inform better policymaking.The writer is associate fellow, Carnegie India