Microsoft Launches $25 Billion Bond Sale Amid Employee Buyouts
In a strategic financial move, Microsoft has announced a $25 billion bond sale just days after offering voluntary exit packages to 60,000 employees.
Microsoft's bond sale attracted $115 billion in orders, significantly exceeding expectations.
The voluntary exit offer affects over 60,000 employees globally, with an expectation of only 3,000 takers.
This marks Microsoft's first bond issuance since 2017, aimed at funding AI and capital expenditures.
Microsoft has initiated a $25 billion bond sale, marking its first investment-grade offering in the U.S. since 2017. This announcement comes shortly after the company offered voluntary exit packages to approximately 60,000 employees. The funds raised from the bond sale are intended for general corporate purposes, particularly to cover rising costs associated with its AI data centers.
The bond sale has garnered significant interest, with orders reaching $115 billion, which is about 4.6 times the amount being offered. The bonds are structured in ten tranches with maturities ranging from 2028 to 2066, and the sale is expected to close on November 4. Microsoft CFO Amy Hood highlighted the company's favorable position in the debt markets, noting that the fixed-rate coupons for the bonds range from 4.85% to 6.35%.
The voluntary exit offer, announced on October 26, targets employees at level 70 and below across various regions, including India, the U.S., Canada, and the UK. This initiative affects more than a quarter of Microsoft's 223,000 full-time workforce. Chief People Officer Amy Coleman emphasized that the program is designed to support employees in their transition, although it is time-limited and voluntary.
Microsoft anticipates that only about 3,000 employees, or 5% of those eligible, will accept the buyout offer. Hood expressed confidence in the company's growth opportunities, suggesting that the majority of employees would prefer to remain with Microsoft. Earlier this year, a similar voluntary retirement offer resulted in approximately one-third of eligible employees opting to leave, which helped mitigate the impact of subsequent layoffs.
Financially, Microsoft reported robust growth, with a 19% increase in revenue and a 48% rise in Azure revenue. The company is forecasting $175 billion in capital expenditures for 2026, indicating a strong commitment to expanding its AI and cloud capabilities. Microsoft plans to unveil more details about its AI and cloud strategies at the upcoming Ignite conference from November 17 to 20.
