Microsoft began offering voluntary buyouts to thousands of U.S. Employees on Thursday, marking the software giant’s first-ever employee buyout program.
The offer covers about 7% of its U.S. Workforce — roughly 8,750 workers — including senior directors and below, and employees whose combined age and years of service total 70 or more, according to an internal memo obtained by CNBC and Bloomberg.
Microsoft employed 228,000 people globally as of June 2025, with 125,000 based in the United States, per a recent SEC filing.
Eligibility criteria target long-tenured and mid-level staff
Workers qualify if their age plus years at Microsoft equals or exceeds 70, a formula designed to encourage departures among older, longer-serving employees without triggering age discrimination claims.
The program excludes executives above the senior director level, focusing instead on managers, individual contributors, and technical staff who may be less central to Microsoft’s AI-driven restructuring.
Details of the severance offers will be shared with eligible employees and their managers on May 7, though the company has not disclosed the exact formula for buyout amounts.
Buyouts come amid surging AI spending and slowing growth in legacy software
Microsoft has sharply increased capital expenditures to build data centers and support AI product development, straining budgets even as revenue growth in cloud and enterprise software moderates.
The move echoes its 2023 layoff of 10,000 employees, when CEO Satya Nadella promised six months of health care, stock vesting, and 60 days of notice in addition to severance — a package now being replaced by voluntary buyouts for a similar scale of workforce reduction.
Shares fell more than 4% on Thursday afternoon, dragging down broader software stocks as investors reacted to the news.
Severance terms likely exceed past packages but remain unconfirmed
Microsoft’s standard severance previously included 12 weeks of base pay plus two additional weeks for each year of employment, though the buyout offer may provide more generous terms to incentivize uptake.
For comparison, a 20-year employee earning $180,000 annually would have received $180,000 under the aged formula, but higher-level or longer-tenured workers could spot significantly larger payouts under the new program.
Other tech firms have offered varying terms: Meta provided 16 weeks base pay plus two weeks per year of service in its 2022 cuts, while Google’s HR buyout last year gave up to 14 weeks salary plus one week per year of tenure.
Who is eligible for the buyout?
Employees at the senior director level or below whose age and years of service at Microsoft add up to 70 or more are eligible for the voluntary buyout program.
When will employees learn the exact buyout amount?
Details of the buyout offers will be disclosed to eligible employees and their managers on May 7, as reported by CNBC.
