Microsoft offers buyouts to about 60,000 employees, roughly a quarter of its workforce
Microsoft's new Voluntary Exit Offer pays standard severance, has no age or tenure rule and reaches some VPs. Decisions are due in early December.
The skim
- Microsoft is offering voluntary buyouts to eligible employees in participating teams in the U.S., Canada, the U.K. and India. About 60,000 people qualify, roughly a quarter of its 223,000-person workforce, according to GeekWire and CNBC.
- The package matches Microsoft's standard severance: pay based on tenure and level, continued stock vesting, healthcare for a fixed period and career transition help. There's no age or tenure requirement.
- Employees have until the first week of December to decide, and those who accept will leave Dec. 31, a person familiar with the plan told CNBC.
What Microsoft announced
Chief People Officer Amy Coleman introduced the "Voluntary Exit Offer" in a memo to staff Monday, which Microsoft published on its blog. It's open to eligible employees "at level 70 and below," she wrote, and "Some organizations are providing the Voluntary Exit Offer, and some are not." The offer "gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support," and gives teams "another way to adapt their workforce to changing needs."
Level 70 on Microsoft's internal scale includes general managers and some employees with vice president titles, but not corporate vice presidents, GeekWire reports. Performance isn't a factor. Business leaders decide whether their groups take part. The sales organization is out, along with some engineering groups and corporate functions. A source told Reuters that teams in AI experiences, Copilot, finance, HR, Xbox and Windows + Devices are eligible, while marketing, commercial business and security are excluded.
How it compares
This is Microsoft's second buyout this year and a much wider one. This spring it ran its first-ever voluntary retirement program, limited to U.S. employees at senior director level and below whose age plus years at the company met a threshold. About 30% of the roughly 8,750 who qualified took it, and Microsoft disclosed a $900 million charge for it in April. In July, Microsoft announced 4,800 layoffs.
The new offer doesn't include the extended healthcare that made the retirement program attractive, and Microsoft told GeekWire it expects a much smaller share of people to accept. It also said the offer isn't a sign it needs fewer employees, and that it isn't a replacement for layoffs, which remain an option depending on business conditions.
Why it matters
Like its peers, Microsoft is under pressure from Wall Street to hold down operating expenses while it pours tens of billions of dollars into AI data centers, GeekWire notes. CNBC frames the program as an AI-driven efficiency push, and Microsoft has been giving engineers, sellers and supply chain staff AI tools while shifting to charging customers by how much AI they use. Other tech giants are under similar pressure. Meta just announced plans to raise up to $95 billion in stock for its own AI spending.
For eligible employees, the clock is short: about five weeks to decide. For investors, the next signal comes Wednesday, when Microsoft reports quarterly earnings and may say what the program will cost.
Sources: Microsoft, GeekWire, CNBC and Reuters via NBC News.
