# Microsoft wants 60,000 people to leave. Here is the bill nobody sends them.

A worked example of what a voluntary exit costs one engineer's family, and who pays after the family

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This week SUSE told its roughly 1,900 employees that about one in ten will go, and the CEO's memo named automation and AI as the reason.\[1\] The week before, on 26 October 2026, Microsoft offered voluntary exit packages to about 60,000 people in the US, Canada, the UK and India, more than a quarter of its workforce.\[2\] Two days later the company said it expects no more than 3,000 to take the deal.\[3\]

Meanwhile the market flinched. Nvidia dropped four sessions in a row and bounced on 3 November, still about 15% under its 52-week high.\[4\] The people in those memos do not appear on a trading screen.

Below is the arithmetic that rarely gets published: what one exit costs one household, and who gets the next invoice.

## We all took the advice

In 2000 Steve Ballmer screamed "Developers!" on a stage. In 2008 Bill Gates told Congress that a computer science graduate from a top school could expect five job offers.\[5\] In 2017 Tim Cook said that if he were a ten-year-old in France he would learn to code before English.\[6\]

It was good advice, and people took it. US bachelor's degrees in computer and information sciences went from 43,066 in 2010-11 to 108,503 in 2021-22.\[7\] Accountants, lawyers and even doctors retrained, while Microsoft grew from 163 thousand employees in mid-2020 to 221 thousand two years later, partly through acquisitions.\[8\]\[9\]

Then the demand curve broke. In January 2023 Nadella cut 10,000 jobs and pointed at customers who had started to economize.\[10\] A year later Jensen Huang said Nvidia's job is to build computing technology so that nobody has to program.\[11\] By 2026 that no longer sounded like a forecast. It sounded like a schedule.

## What "AI writes the code" looks like on the inside

Anthropic's S-1 says its model wrote more than 90% of the changes to the company's codebase in September 2026, and that daily added code per engineer in the third quarter was more than 45 times the 2024 level.\[12\] Git could not keep up. Daily merges into the main branch grew from 2,500 in May to over 30,000 in September, and within five months the company had built its own version control system.\[13\]

The engineer in that picture hands tasks to agents, steers them and checks what comes back. One Anthropic employee described his good days in May 2026 as "everything is automated and better and faster than I ever will be", and on the bad days, by his own account, he realized he had no idea what he had been doing.\[14\]

Once writing and first-pass review move to machines, the first people a company stops needing are juniors. A Stanford Digital Economy Lab study found employment among 22-25-year-olds in the most AI-exposed occupations running 19% below that of peers in less exposed ones, and the gap comes mostly from hiring.\[15\] Challenger counted 165,925 announced US tech job cuts from January through September 2026, 54% more than a year earlier.\[16\]

Even the "safe" old knowledge is being priced out. COBOL runs banks and mainframes, and learning it took decades.\[17\] IBM now sells tools that explain COBOL, rewrite it and convert parts of it to Java,\[18\] and Anthropic pitches automated COBOL analysis as a way to cut modernization costs.\[19\] A recent Habr analysis of programming languages makes the general point, and cites a rewrite of 535 thousand lines of Bun in Rust in 11 days for about $165 thousand in API costs.\[20\] That is one author's figure, but it points one way: moving old code is getting cheaper fast.

Zuckerberg told Meta staff that computing and people are the company's two biggest costs, and growing the first means shrinking the second.\[21\] To investors headcount has long looked like ballast. Throwing it overboard looks like discipline.

## One family, one exit

Meet Nathan Brooks, a fictional engineer in Redmond. He is 41, has five years at Microsoft and a $200,000 base salary plus stock and bonus. His wife works too. They have two kids. Take-home pay is $15,000 a month, $10,000 from Nathan and $5,000 from her. Spending is $11,000, including a $4,000 mortgage payment. They save $4,000.

Nathan takes the exit offer. Business Insider reported that US employees up to level 64 were offered one week of base pay per six months of service, and levels 65-67 two weeks. For five years at $200,000 that is about $38,500 or $76,900 before tax.\[22\]

Now the paycheck stops. The family still earns $5,000 and spends $11,000. The hole is $6,000 every month. With an $80,000 reserve including severance, $36,000 is gone in half a year. Had he stayed, they would have saved another $24,000 over those same six months.

Health insurance goes next. In the 2026 KFF survey a family plan through an employer cost $28,303 a year on average, and the employee paid $7,471 of it.\[23\] Under COBRA you keep the coverage and pay the whole bill.\[24\] In this calculation the monthly premium goes from about $623 to $2,406.

Washington's maximum unemployment benefit is $1,208 a week, at most $31.4 thousand over 26 weeks before tax, and eligibility after a voluntary exit depends on the program's terms.\[25\] The mortgage is still due on the first.

Getting back to work is slow and often pays less. The BLS says about 51% of displaced workers with three or more years in the lost job who returned to full-time work earned less than before. In the previous survey it was about 38%.\[26\] The Urban Institute followed Americans who were 51-54 and had spent at least five years with one employer. Among those pushed out with severe consequences, only about one in ten got back to their previous weekly earnings.\[27\] That research predates the current wave.

Take a second fictional engineer, Arun Menon, 52, with fifteen years in one company's products. A $140,000 offer instead of $200,000 means $300,000 less before tax over five years, plus lost stock and bonuses. If he ends up at $40,000 a year outside the profession, that is $3,333 a month before tax, less than one mortgage payment in this example. The statistics will count him as employed.

## Who pays after the family

Part of Washington's school funding follows enrollment.\[28\] Fewer kids still leave the same buildings to heat. The Lake Washington School District, which includes Redmond, has been reviewing capacity and boundaries since August 2026, and merging or closing schools is on the table, with any approved changes planned from September 2028.\[29\]

Then the second ring. Take 10,000 families in one metro area who each cut spending by $1,500 a month: that is $180 million a year. If 60% of it used to stay with local businesses, they lose $108 million. A café with $100,000 in monthly sales, 35% variable costs and $60,000 of fixed costs earns $5,000. After a 10% drop in revenue it loses $1,500 a month. The owner covers a few months from savings, then cuts shifts, and the waiter loses income right behind the customer who stopped coming. He gets no exit package.

Then the houses go on sale. King County condo inventory was already at about seven months of sales in September, with the median price 6% lower than a year before.\[30\] Offices empty out: in Q3 2026, 22.2% of surveyed Eastside office space and 14.4% in Redmond stood vacant.\[31\] The city of Redmond charges $160 per full-time equivalent in its business license fee, so a hypothetical 10,000 lost positions in the local base is $1.6 million a year.\[32\] The light rail across Lake Washington opened in March, and it costs the same to run with fewer riders.\[33\]

## Fire people, spend less, get applauded?

Spin it however you like, the week's scoreboard is awkward for the AI-spending story. Microsoft offered 60,000 people the door on 26 October. Two days later it reported Azure growth of 48% to $33.2 billion, free cash flow of $18.6 billion and capital spending of $45.2 billion, below its own $50 billion quarterly forecast, and its shares rose more than 3% after hours.\[34\] Alphabet reported the same day revenue of $127.6 billion, up 25% but short of expectations, capex of $51.3 billion and free cash flow of minus $9.1 billion, the second negative quarter in a row. Its shares fell by more than 10% after hours, even though Google Cloud revenue more than doubled to $30.7 billion.\[34\]

A cynic would say the market paid the company that kept its cash and punished the one that burned it on AI infrastructure. The people on Microsoft's exit list are part of that discipline. That is a correlation, not proof that the cuts caused the rally, and Alphabet's drop is about cash flow, not headcount. What investors rewarded this week was cash discipline, and payroll is part of that.

If you want the long view, Appendix 1 shows that over three years the shares of all eight companies I tracked rose, and seven of them announced layoffs. Alphabet is up 165.9% over the period even after this week.

## The books

For the fiscal year ended June 2026 Microsoft reported $331.8 billion in revenue and $155.2 billion in operating income.\[35\] It paid about $26.4 billion in dividends and spent $16.7 billion on buybacks.\[35\] July-September net income was $36.6 billion, published two days after the exit offer.\[36\]

Base salaries of 60,000 people come to $6 billion at a $100,000 average and $12 billion at $200,000. The upper figure is about 7.7% of annual operating income. Capital spending for calendar 2026 is planned at about $170 billion.\[37\]

Management decides how much goes to staff, how much to data centers and how much to shareholders, and it has decided that fewer people is how it keeps spending big. The company keeps what those employees built. Working out how their families live is left to the families.

On 22 October Bill Gates warned of a twenty-year transition with winners, losers and a lot of disruption, followed by what he described as an era of abundance.\[38\] The advice is free, and nobody even asked for it. It comes from a man whose Medina estate was valued at $132 million in 2025.\[39\] For Arun, the end of that transition falls when he is seventy-two. In the forecast that is two words, "transition period". The families will live through it at their own expense.

## Before you call me a doomer

Not everyone reads the layoffs as an AI story. Some analysts, including Cognizant's chief AI officer in a Nikkei Asia report, call AI a scapegoat for overhiring and general restructuring.\[40\] Microsoft expects only a few thousand takers of its offer, not 60,000.\[3\] And the same week the chips wobbled, the people betting hardest on AI were reminded that valuations are not laws of nature.\[4\]

I do not know that work disappears. The sources above show something narrower: entry-level hiring is shrinking, large employers are naming AI as the reason for cuts, and the cost of an exit lands first on a household and then on everyone who sold that household something.

## Two appendices

- **Appendix 1.** [Layoffs and share prices at eight tech companies over three years (PDF)](https://kugno.ru/wp-content/uploads/2026/11/appendix-1-layoffs-and-share-prices-tech-companies.pdf). Price charts against the NASDAQ-100 and price moves after each announcement. All eight stocks rose over the period, and seven of the companies announced cuts.
- **Appendix 2.** [Who captures the savings from AI in software development (PDF)](https://kugno.ru/wp-content/uploads/2026/11/appendix-2-ai-software-development-savings.pdf). Calculations on how AI changes the cost of software work, and who ends up with the savings: the employee, the customer, the contractor or the compute provider.

P.S. If you write code for a living, do your own COBRA math this weekend. It takes ten minutes and nobody else will do it for you.

*Nathan Brooks and Arun Menon are fictional. The reserve, café and local spending figures are illustrations of arithmetic, not forecasts.*

## Sources

1. [The Register: SUSE to cut one in ten employees because of... AI, 2 November 2026](https://www.theregister.com/software/2026/11/02/suse-to-cut-one-in-ten-employees-because-of-ai/5306950)
2. [Microsoft: Voluntary Exit Offer, 26 October 2026](https://blogs.microsoft.com/blog/2026/10/26/introducing-a-voluntary-exit-offer/); [GeekWire](https://www.geekwire.com/2026/microsoft-makes-new-voluntary-exit-offer-to-more-than-a-quarter-of-its-workforce-including-some-execs/)
3. [Business Insider: Microsoft expects very few acceptances, 28 October 2026](https://www.businessinsider.com/microsoft-expects-very-few-people-to-accept-buyouts-cfo-says-2026-10)
4. [Nvidia stock news, 3 November 2026, Gotrade](https://www.heygotrade.com/en/news/nvidia-nvda-stock-news-november-4-2026/)
5. [US House hearing with Bill Gates, 12 March 2008](https://www.govinfo.gov/content/pkg/CHRG-110hhrg41066/html/CHRG-110hhrg41066.htm)
6. [Tim Cook interview, October 2017, 9to5Mac](https://9to5mac.com/2017/10/10/tim-cook-interview-video/)
7. [NCES Table 325.35](https://nces.ed.gov/programs/digest/d23/tables/dt23_325.35.asp)
8. [Microsoft Annual Report 2020](https://www.microsoft.com/investor/reports/ar20/index.html)
9. [Microsoft Annual Report 2022](https://www.microsoft.com/investor/reports/ar22/index.html)
10. [Satya Nadella, letter of 18 January 2023](https://blogs.microsoft.com/blog/2023/01/18/subject-focusing-on-our-short-and-long-term-opportunity/)
11. [NVIDIA, Jensen Huang remarks, 12 February 2024](https://blogs.nvidia.com/blog/world-governments-summit/)
12. [Anthropic S-1, filed 26 October 2026](https://www.sec.gov/Archives/edgar/data/2130357/000162828026067168/anthropicpbc-sx1.htm)
13. [Anthropic: Redesigning source control](https://www.anthropic.com/research/redesigning-source-control)
14. [Anthropic Institute: When AI builds itself](https://www.anthropic.com/institute/recursive-self-improvement)
15. [Stanford Digital Economy Lab: Canaries in the Coal Mine?](https://digitaleconomy.stanford.edu/publication/canaries-in-the-coal-mine-six-facts-about-the-recent-employment-effects-of-artificial-intelligence/)
16. [Challenger, Gray & Christmas, January-September 2026](https://www.challengergray.com/blog/job-cuts-fall-in-september-hiring-plans-up-3-over-2025-on-weak-early-seasonal-hiring/)
17. [IBM: What is a mainframe?](https://www.ibm.com/think/topics/mainframe)
18. [IBM watsonx Code Assistant for Z](https://www.ibm.com/docs/en/watsonx/watsonx-code-assistant-4z/2.x?topic=welcome-about-watsonx-code-assistant-z)
19. [Anthropic: How AI helps break the cost barrier to COBOL modernization](https://claude.com/resources/articles/how-ai-helps-break-cost-barrier-cobol-modernization)
20. [Habr: The last programming language has already been written (in Russian), 2 November 2026](https://habr.com/ru/articles/1102558/). Secondary source for the Bun figures
21. [Reuters via MarketScreener: Zuckerberg on layoffs and capex, 30 April 2026](https://www.marketscreener.com/news/meta-ceo-attributes-layoffs-plan-to-capex-won-t-rule-out-further-job-cuts-ce7f58d8df8df723)
22. [Business Insider: exit offer terms, 26 October 2026](https://www.businessinsider.com/microsoft-employee-buyout-offer-2026-10)
23. [KFF Employer Health Benefits Survey 2026](https://www.kff.org/health-costs/2026-employer-health-benefits-survey/)
24. [CMS: COBRA continuation coverage](https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/cobra_fact_sheet). Calculation: $28,303 × 1.02 / 12 ≈ $2,406; $7,471 / 12 ≈ $623
25. [Washington ESD](https://esd.wa.gov/about-us/news-release/2026/new-average-annual-wage-estimates-adjust-unemployment-insurance-and-paid-leave-benefits); [RCW 50.20.120](https://app.leg.wa.gov/rcw/default.aspx?cite=50.20.120); [RCW 50.20.055](https://app.leg.wa.gov/RCW/default.aspx?cite=50.20.055)
26. [BLS: Worker Displacement 2023-2025](https://www.bls.gov/news.release/disp.nr0.htm); [Table 7](https://www.bls.gov/news.release/disp.t07.htm)
27. [Urban Institute: How Secure Is Employment at Older Ages?](https://www.urban.org/sites/default/files/publication/99570/how_secure_is_employment_at_older_ages_2.pdf)
28. [OSPI: Washington school funding](https://ospi.k12.wa.us/policy-funding/legislative-priorities/understanding-public-school-funding)
29. [Lake Washington School District review](https://www.lwsd.org/realignment)
30. [NWMLS, September 2026](https://www.nwmls.com/home-inventory-reaches-highest-level-since-2014-expanding-buyer-choices/)
31. [Kidder Mathews, Q3 2026 office market](https://kidder.com/market-reports/seattle-office-market-report/)
32. [Redmond business licensing](https://www.redmond.gov/230/Business-Licensing)
33. [Sound Transit: Lake Washington connection opens](https://www.soundtransit.org/get-to-know-us/news-events/news-releases/link-light-rail-opens-across-lake-washington)
34. [Forbes Ukraine: Alphabet shares fell more than 10% on AI spending and slower ad growth, 29 October 2026](https://forbes.ua/ru/news/akciyi-alphabet-vpali-na-ponad-10-cerez-vitrati-na-si-ta-upovilnennia-reklami-google-29102026-43340) (in Russian; the Microsoft figures are as reported there)
35. [Microsoft Annual Report 2026](https://www.microsoft.com/investor/reports/ar26/index.html)
36. [Microsoft FY2027 Q1 results](https://www.microsoft.com/en-us/investor/earnings/fy-2027-q1/press-release-webcast)
37. [Amy Hood, earnings call, 28 October 2026](https://www.fool.com/earnings/call-transcripts/2026/10/29/microsoft-msft-q1-2027-earnings-call-transcript/)
38. [Bill Gates on Decoder, The Verge, 22 October 2026](https://www.theverge.com/podcast/1015408/bill-gates-ai-interview-microsoft-openai-anthropic-risk-policy-regulation) (paraphrased)
39. [Downtown Bellevue Network, 12 February 2026](https://downtownbellevue.com/2026/02/12/bill-gates-medina-home-pending-xanadu-2-0-estate-4-8-million/)
40. [TechRadar on Q1 2026 tech layoffs and Nikkei Asia reporting](https://techradar.com/pro/nearly-80-000-tech-workers-have-already-lost-their-jobs-in-2026-and-ai-impact-means-more-could-be-to-come)