Microsoft opens voluntary exit option for employees, offering free healthcare, cash and other things

Microsoft has introduced its first-ever voluntary retirement programme for long-serving US employees, offering healthcare benefits, cash payouts, and stock vesting support. The move could impact nearly 8,750 workers as the company changes its workforce strategy.

In Short

• Microsoft has opened its new exit program for eligible employees
• Healthcare cover is fully subsidised for one year, then premiums apply
• The eligible staff need age and service years together to reach 70

Microsoft is opening the door for thousands of long-serving employees in the US to leave the company with a decent support package that includes healthcare coverage, cash payouts, and stock benefits. The move is a major moment for the tech giant because this is the first voluntary retirement program in Microsoft’s 50-year history. The company had first revealed plans for the program last month, but the full details have now appeared on Microsoft's internal HR portal ahead of schedule, all thanks to The Verge as we now have early access to the details. The offer is aimed at employees whose age and years of service together add up to 70 or more. In simple terms, an employee aged 50 with 20 years at Microsoft, or someone aged 55 with 15 years at the company, could qualify for the scheme. Here are all the details that you are looking for.

What Microsoft employees will get under the new exit program

Employees who decide to take the offer will receive multiple benefits. One of the biggest highlights is healthcare support for up to five years. Microsoft will fully cover medical, dental, vision, and wellness expenses during the first year. For the remaining four years, employees can continue the coverage by paying a monthly premium themselves.

Apart from healthcare, Microsoft is also offering a lump-sum severance package. The amount will depend on an employee's seniority and years of service. Mid-to-senior level employees at level 64 will receive one week of base salary for every six months they have worked at Microsoft, with the total payout capped at 39 weeks of pay. Employees in more senior roles, including levels 65 to 67, will receive two weeks of pay for every six months of service, again with a maximum limit of 39 weeks.

The company is also sweetening the deal with stock-related benefits. Employees taking the buyout will get six months of vesting for unvested stock awards. Those who have spent 24 years or more continuously at Microsoft will receive 12 months of vesting instead.

According to reports, around 7 per cent of Microsoft's US workforce qualifies for the program. That translates to nearly 8,750 employees. As of June 2025, Microsoft had about 228,000 employees globally, including roughly 125,000 in the United States.

Employees eligible for the program will have 30 days to decide whether they want to accept the offer. Microsoft is said to take a one-time charge of about $900 million for the program in the current quarter. Interestingly, reports point out that the amount is roughly equivalent to just one day of revenue for the company.

The voluntary retirement plan also comes after Microsoft spent much of last year reducing costs through multiple rounds of layoffs. Unlike layoffs, however, the current program gives employees the option to leave on their own terms with financial and healthcare support attached.

"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Amy Coleman, Microsoft’s executive vice president and chief people officer, said in a memo viewed by CNBC.

Alongside the retirement program, Microsoft is also changing how it rewards employees internally. The company will no longer require managers to directly link stock rewards with cash bonuses during annual compensation reviews. According to Coleman, the new system is designed to give managers "more flexibility to meaningfully recognise high performance."

Microsoft is also streamlining its employee evaluation system. Instead of selecting from nine different pay categories, managers will now have just five options, a change aimed at making performance reviews quicker and more straightforward across departments.

- Ends