Microsoft is offering voluntary retirement buyouts to about 8,750 U.S. workers for the first time

With 125,000 employees on U.S. payroll as of June 2025, the pool of potentially eligible workers comes to roughly 8,750 people, GeekWire reported. To qualify, an employee must hold a rank no higher than senior director, be outside the sales incentive plan structure, and have an age-plus-tenure figure that reaches at least 70.

The program was announced in a memo to employees from Amy Coleman, Microsoft's EVP and chief people officer. "Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Coleman wrote. Full program details will go out to qualifying employees and their managers on May 7, after which a 30-day decision window opens.

Specific financial terms of the package have not been disclosed. Healthcare coverage is expected to be a notable feature of the package — particularly for workers who have not yet reached Medicare eligibility age — and GeekWire reported that departing employees would face no constraints on taking future jobs. Timing-wise, the retirement offering is slated to roll out during the fiscal fourth quarter, with CFO Amy Hood anticipated to field questions about it when Microsoft reports earnings next week.

Unlike in legacy sectors where structured exit incentives have long been routine, big technology firms have historically reached for layoffs and performance-based attrition rather than voluntary retirement offers when trimming headcount, Bloomberg noted. Microsoft itself conducted multiple rounds of layoffs last year, cutting more than 15,000 employees.

In the same memo, Coleman also described changes to Microsoft’s pay structure. The company will reduce the number of manager tiers from nine to five and will separate equity grants from bonuses. This change means stock awards can go to employees with strong long-term performance, instead of being tied to just one performance cycle.

Microsoft has been investing heavily in data center infrastructure to support demand for generative AI services. A separate announcement from Microsoft this week put $18 billion toward AI cloud and infrastructure expansion in Australia — a record commitment for the company in that country — following a $10 billion, four-year pledge it had made for Japan, according to Bloomberg.