Microsoft Net Income Rises 32% to $36.6 Billion as It Offers Buyouts to About 60,000 Staff

Azure grew 48% and revenue rose 19%, while the company plans more than $50 billion of capital spending in the December quarter.

Microsoft reported net income of $36.6 billion for the July–September quarter, up 32% from a year earlier, driven by strong cloud demand. The results arrive days after the company announced a voluntary exit programme for about 60,000 employees in select teams.

For the first quarter of fiscal 2027, revenue rose 19% to $92.3 billion from $77.7 billion a year ago. Operating income grew 21% to $45.9 billion. Microsoft is spending heavily on AI, cloud infrastructure and computing capacity while also reshaping its workforce.

Cloud keeps growing

Microsoft Cloud revenue climbed 30% to $63.9 billion, and Azure revenue rose 48%. Revenue from the Agents and Infrastructure segment grew 25% to $76.8 billion. Commercial remaining performance obligations, which is contracted revenue not yet recognised, jumped 73% to $677 billion.

Chief Financial Officer Amy Hood said the company beat expectations on revenue, operating income and earnings per share. AI-related computing needs are driving demand for more data-centre capacity and cloud services.

Earnings and outlook

Diluted earnings per share rose 32% to $4.92. Excluding the impact of investments in OpenAI, adjusted net income rose 18% to $36.4 billion and adjusted EPS grew 18% to $4.89.

For the December quarter, Microsoft expects revenue of $96 billion to $97.1 billion, up about 18% to 19%. It forecasts Azure growth of 49% to 50% in constant currency. Hood said customer demand still exceeds available supply, though efficiency gains in computing infrastructure are helping it serve more of that demand.

Spending above $50 billion

Capital expenditure was $45.2 billion in the September quarter, and Microsoft expects more than $50 billion in the December quarter. For calendar 2026, it projects about $170 billion, partly because some computing capacity deliveries slipped from earlier periods. The scale of investment puts more weight on operating efficiency and the returns from that infrastructure.

Not every segment grew. Devices and Consumer revenue fell 3% to $15.5 billion, with Windows OEM and devices down 22% and Xbox content and services down 2%. Search and advertising revenue, excluding traffic acquisition costs, rose 12%.

Buyouts for about 60,000 employees

Alongside the results, Microsoft is offering voluntary buyouts to approximately 60,000 employees, more than a quarter of its global workforce of about 223,000. Chief People Officer Amy Coleman announced the Voluntary Exit Offer (VEO), which gives eligible employees financial support and career transition help if they are considering leaving.

The programme covers participating teams in the US, Canada, the UK and India. Eligible employees at internal level 70 and below have until the first week of December to decide, and those who accept are expected to leave at the end of the year.

The package follows Microsoft’s standard severance arrangements. Unlike the voluntary retirement programme introduced earlier in 2026, this offer has no age or tenure requirement, and performance does not decide eligibility.

It is not open to everyone at those levels, though. Individual business leaders will decide participation based on their teams’ priorities, customer commitments and workforce needs. The earlier voluntary retirement programme was aimed at a narrower group of US employees.

AI investment and a workforce reset

Microsoft’s results highlight two trends shaping the tech industry: rising demand for cloud and AI infrastructure, and big companies adjusting their workforces and cost structures to changing needs. Strong cloud revenue and heavy capital spending show how much Microsoft is investing in future capability, while the voluntary exit offer gives it another way to adjust staffing without relying only on compulsory layoffs.

Heading into the next quarter, its performance will depend on sustaining cloud growth, converting contracted demand into recognised revenue and making sure its infrastructure spending pays off in long-term profitability.