Microsoft Offers First-Ever Retirement Buyouts to Thousands of Employees

In a historic first for its 51-year history, Microsoft is offering a one-time voluntary retirement program to select US employees, driven by the massive AI boom. Workers at the senior director level and below whose age and years of employment sum to 70 or higher are eligible, representing about 7% of Microsoft’s 125,000-person US workforce—or roughly 8,750 employees. Eligible employees and their managers will be notified on May 7 and will have 30 days to respond, though people with sales incentive plans cannot participate. Chief People Officer Amy Coleman framed the program as an offering for long-time staff, saying, “Many of these employees have spent years, and in some cases, decades, shaping Microsoft into what it is today.”

This move comes as Microsoft increases spending on compute power in data centers to meet client demand for generative AI models, following layoffs of over 15,000 employees last year and a return-to-office mandate in Seattle. Coleman also announced changes to Microsoft’s compensation system, reducing pay levels from nine to five and separating stock awards from bonuses to give managers more flexibility to reward high performers. Those who accept the retirement deal face no restrictions on future employment. The program mirrors broader industry trends: tech giants like Meta, Snap, and Oracle have announced layoffs, often citing AI as a reason, while even non-tech companies like Disney are shifting toward automation.