Are buyouts replacing layoffs? How big tech is quietly cutting jobs

Based on recent reports, economists are estimating that about one-third of resignations in Silicon Valley this year may not be voluntary but negotiated with compensation. Google and Amazon have been reportedly paying extra weeks of salary to discreetly sack those deemed ‘misaligned’ employees. This signals a fundamental shift in how the tech industry is managing workforce reduction at a time when AI is rapidly advancing and virtually taking over newer domains of work that once needed human expertise. Looking at the last few years, tech companies have experimented with almost every method in the book to reduce their workforce. While earlier approaches included sudden mass layoffs, performance improvement schemes aimed at forcing resignations, and even hiring freezes for extended periods of time, things are changing now. Instead of ostentatious layoffs that would likely lead to negative publicity and likely legal challenges, big tech seems to be resorting to voluntary exit packages or buyouts that are discreet. Buyouts are when a company offers a voluntary severance package to employees, encouraging them to leave jobs. 

Google seems to be leading this shift. Earlier this month, it was reported that the Alphabet Inc. company was offering buyouts to staff across several divisions. This time the company did not reveal the number of employees impacted. These buyouts were offered to employees from knowledge and information, central engineering units, and even from the core search and advertising units which are critical to the company’s profits. According to an internal memo to staff, Google executive Nick Fox informed that employees who were not meeting expectations may want to take the buyout, and those who are excited by their work will continue with the company. The buyout from Google seems to be offering generous severance packages to employees considered misaligned with its AI-focused roadmap. This comes after Google’s mass layoffs in 2023 that impacted over 12,000 employees. 

Even though they are quiet, the scale of these layoffs remains massive. According to Layoffs.fyi, a site that tracks tech layoffs in real realtime, so far 141 tech companies have laid off 62,832 employees in the first half of 2025. While the volume of layoffs hasn’t changed much, what has changed indeed is the pace. From one-day mass layoffs to now, the industry has adopted a workforce reduction that is essentially spread over months. And these come dressed in fineries such as ‘workforce realignment’, ‘organisational restructuring’, ‘talent mobility’, etc. 

How do buyouts work?

Google launched its voluntary exit programme earlier this year, and it was reportedly aimed at around 25,000 employees who were involved with developing the company’s operating systems. As part of the programme, eligible US-based employees would receive around 14 weeks of base pay plus one additional week for each year of service, along with accelerating stock vesting (a process where an employee gains full rights over their stock options of shares offered by the company) and six months of health coverage. The programme seems to be expanding steadily, as earlier this month it was extended to the Knowledge and Information group that has about 20,000 employees. 

From Google’s perspective, employees who accept buyouts are statistically less productive under the AI-centric approach. Moreover, the cost of severance packages is lower than keeping ‘misaligned’ employees on payroll forever. Reportedly, voluntary exits facilitate staff cuts with minimal hassle, as they involve less documentation, almost no lawsuits, and a defined exit budget. It is not just Google; more companies are following suit. Reportedly, Microsoft is offering 16 weeks of salary to low-performing employees who opt for voluntary exit. On the other hand, Amazon was among the first to introduce a three-month salary package to employees resisting work-from-office mandates. While there is a cost to companies with buyouts, big tech seems to be viewing these voluntary exits as more profitable than forced resignations, which could also lead to lawsuits, demoralisation among staff, and damage to goodwill and reputation.

For companies the rationale moves beyond cost savings. Some experts feel that severance packages could free up the budget to hire AI talent that require premium pay packages. Reportedly, Microsoft pays AI engineers up to $375,000 annually, which is substantially higher than standard developers. For senior staff, buyouts afford them the resources they need during the job search. However, younger staff with minimal tenure receive smaller severance packages and are thrust into an oversaturated market. 

What does it mean for the future?

Employees accepting buyouts may be higher, since there is a lack of clarity on exact numbers. For high-performing employees, these severance packages may help them embark on their startup journeys. While buyout packages allow companies to cut costs while maintaining employee morale, their risks include uneven loss of critical talent and disruption in alignments within teams. As of today, there are AI-driven efficiency pressures, and more roles seem to be becoming obsolete, pushing companies to push for voluntary exits. This could signal a future of lean hybrid workforces with fewer permanent roles, and continuous reskilling and employee adaptability becoming a necessity. 

With AI continuing to automate various functions, companies will be compelled to reconfigure their workforces. In an alternative scenario, if talent becomes scarce, companies may have to switch back to retention packages. This quiet restructuring is changing thousands of career paths, yet its true scale remains largely invisible.