"Hire The Robot, Fire The Human": Gates' Warning, Then Microsoft Buyouts

"The incentive structure is wrong. It's 'hire the robot, fire the human and don't look back'," Microsoft co-founder Bill Gates said in an interview published in The Observer on Sunday. Ironically, on Monday Microsoft announced buyouts to about 60,000 employees, roughly a quarter of its workforce, across the US, Canada, the UK and India.

To be sure Gates no longer holds an official executive or board role at Microsoft.

Watch our quick take:

Gates' Warning 

Bill Gates calls the AI age an "evolutionary event," where humans are no longer the smartest things on the planet. He expects AI to take over almost all work skills, starting with white-collar jobs, followed by blue collar jobs and physical labour.

And Gates' bigger worry is that fewer workers would mean less tax money. In his words, the safety net will shrink "even though overall prosperity gets better."
He suggests a "token tax" on AI use, and higher taxes on billionaires. Gates is willing to walk the talk - he says he's paid $14 billion in tax but would have been willing to pay $40 billion.

What's Microsoft Offering Employees

Microsoft's "Voluntary Exit Offer" is open to employees at "level 70 and below" in participating teams across the US, Canada, the UK and India.
So what does level 70 mean? Microsoft ranks its staff on an internal numbered scale, where a bigger number means a more senior role. According to SiliconANGLE, the most senior people covered by this offer are vice presidents. 

Not every team is taking part, though, and some marketing, sales and engineering groups have reportedly opted out. That's why the offer reaches about 60,000 people, roughly a quarter of the company, and not everyone under the cap.

The employees who accept the buyout get severance, which depends on seniority. According to a Business Insider report, staff at level 64 and below get one week of pay for every six months at the company, while levels 65 to 67 get two weeks. They also get six to 12 months of stock vesting, continued healthcare for a limited period, and help finding their next job.

Employees have until early December to decide, and those who say yes will leave later that month.

"The Voluntary Exit Offer is new for us. We'll learn from it," Microsoft's chief people officer Amy Coleman said in a memo to staff.
Microsoft says AI is not behind the move. Reuters, however, reports the company is looking to contain costs and help fund its massive AI investments.
It's also not the first time this year something like this is happening. In April, Microsoft ran its first-ever voluntary retirement program for about 8,750 US employees, based on a different formula: age plus years of service adding up to 70 or more. More than 30% of those eligible took it. That came after around 15,000 layoffs in 2025.

The Big Picture

To be sure, Gates isn't claiming AI is all bad. He pointed to the upside too, such as faster drug discovery. But he says the technology will be a "real test of quality of government," at a time when rich countries are already stretched on several fronts and geopolitical tensions are high.

"You could say this isn't the best time to say, hey, rich countries, let's do the hardest thing you've ever done," he said.

He's not alone in worrying about who benefits. A 2024 analysis by the International Monetary Fund (IMF) found that incomes could rise for most workers if AI's productivity gains are big enough. But it also warned that income inequality among workers could widen if AI mainly helps higher-paid employees, and that rising returns to capital would deepen wealth inequality. 

For advanced economies, the IMF said helping workers move into new roles and protecting those hit hardest should be policy priorities.

Gates's warning and Microsoft's buyout offer are separate events, but it's almost impossible to ignore that they hit on back-to-back days. 

As companies increasingly invest money into AI, who bears the cost of the shift is the big question the answer at this point.

For India, home to some of the world's largest tech workforces and now on the list of countries where Microsoft is making its offer, it's a question that's likely to get louder.