Microsoft raises $25 billion in bonds days after offering exit packages to 60,000 staff
Microsoft announced the offer on October 26 for eligible employees at level 70 and below in participating teams. That is more than a quarter of its 223,000 full-time workforce. Earlier this year, a voluntary retirement offer to about 9,000 US employees was accepted by roughly one-third of those eligible, which helped Microsoft cut fewer people in later layoffs. In July, the company announced 4,800 job cuts, or about 2.1 percent of its workforce, while overhauling Xbox.
Chief People Officer Amy Coleman said it lets employees “make that transition now with support. A source familiar with the plan said eligible teams include AI experiences, Copilot, finance, HR, Xbox and Windows + Devices. Microsoft calls it time-limited and voluntary. Marketing, commercial business and security are excluded.
Microsoft’s $25 billion bond sale drew $115 billion in orders
Microsoft has priced a $25 billion bond sale, its first US investment-grade offering since 2017, just three days after it offered voluntary exit packages to about 60,000 employees. Orders peaked at $115 billion, about 4.6 times the amount on offer, according to people familiar with the deal. Fixed-rate coupons run from 4.85 percent on $2 billion of notes due 2028 to 6.35 percent on $2 billion of notes due 2066. Two tranches are floating-rate notes worth $1 billion each.
The company says the money will go towards general corporate purposes, including capital expenditure, as its AI data centre bills keep climbing. Investors had a clear reason to line up. Microsoft and Johnson & Johnson are the only publicly traded US companies with AAA ratings from both Moody’s and S&P.