'AI can't do your job': Microsoft under fire over global outage days after offering buyouts to 60,000 employees

Microsoft is in the midst of a major outage that has entered its second day, disrupting several of its services across the world. The disruption, which affected Microsoft products in 74 countries and territories, is yet to be fully resolved. Amid growing frustration, several users took to social media to criticise the tech giant, linking the outage to its decision to offer voluntary exit packages to around 60,000 employees in October.

Microsoft outage: What happened?

The outage was first reported on Thursday, affecting Outlook, Teams and several other Microsoft 365 applications. According to Downdetector, reports of problems with Outlook peaked at 1,38,058 around 1 pm ET before declining to approximately 34,490 by Thursday evening.

Microsoft said the disruption was linked to several servers becoming unexpectedly unavailable under elevated load, rather than an increase in traffic. "We are aware and investigating reports of users experiencing issues with Microsoft 365 services, primarily issues with Exchange Online," the company said in a statement, according to a report.



Microsoft said the servers that had been restored remained stable. It was also shifting traffic to alternate routes wherever possible while working to bring the remaining affected servers back online. "As capacity is restored, users may experience a gradual recovery as their clients reconnect," Microsoft said.

The outage also affected businesses and organisations that rely on Microsoft's infrastructure, including OpenAI and Anthropic, as well as government services in countries such as the UK and Australia.

Microsoft faces social media backlash

Meanwhile, several users took to social media to slam Microsoft, questioning its decision to reduce its workforce while increasing investments in artificial intelligence.

"Microsoft, 2 weeks ago, forced 'voluntary' layoff packages on 60,000 people - close to 1/3 of its workforce - citing the competency of AI as its reasoning. Outlook has had a WORLD wide outage since 2pm EST. How's that AI working now?" one user wrote on X.


Another user commented: "Microsoft has laid off thousands of employees while investing billions in AI. Now Outlook goes down, and everyone is depending on human engineers to get things running again. It's interesting how companies keep talking about replacing people until something breaks and they need people to fix it."

"Microsoft does layoffs/early exit packages….Microsoft email, teams and other servers go down a week later. AI Team that was left," a third user quipped.

Why is Microsoft offering buyouts to employees?

Microsoft offered voluntary buyout packages to approximately 60,000 employees, representing nearly 27% of its 223,000 full-time workforce. The programme, announced in October this year, was called the Voluntary Exit Offer.

According to reports, Microsoft is looking to control costs even as it ramps up spending on artificial intelligence to compete with other technology giants, including Google and Amazon.

In July, the company said it had spent $41 billion between April and June and expected its spending to reach $50 billion between July and September.

Microsoft subsequently lowered its capital expenditure forecast for calendar year 2026 to $175 billion from its earlier projection of $190 billion.