After 15,000 layoffs, Microsoft offers voluntary exit to select employees as AI reshapes workforce

Microsoft introduces voluntary retirement buyouts for up to 7 per cent of employees as it navigates AI-driven changes, workforce restructuring, and cost-cutting measures.

In Short

• Microsoft announces voluntary buyouts for up to 7 per cent employees
• Program targets senior directors meeting age and service criteria
• Move comes amid AI-driven changes and ongoing cost cuts

Microsoft is offering voluntary retirement buyouts to up to 7 per cent of its employees. This is the first time in the company's history that it is offering buyouts at this scale. The buyout comes at a time when the company is facing major changes due to artificial intelligence. According to an announcement in an internal memo on Thursday, the one-time retirement program will be available to U.S. workers at the senior director level. Employees will be eligible if their years of work at Microsoft plus their age totals 70 or more, with some exceptions.

“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, executive vice president and chief people officer at Microsoft, wrote in a memo viewed by CNBC.

The publication said eligible employees and their managers will receive details on May 7. However, those with sales incentive plans cannot participate in this one-time retirement program.

Cost-cutting efforts and workforce changes

Microsoft has been cutting costs through multiple rounds of layoffs. As of June 2025, the company had 228,000 employees, with 125,000 in the U.S. Most recently, the company cut 9,000 jobs last year.

Tech giants including Amazon, Meta, and Oracle are readjusting their workforce to cut costs and ramp up capital spending on data centers to supply cloud clients with computing power that can handle generative AI models.

While their stocks are getting hammered, coding tools from Anthropic and others threaten to disrupt established companies.

Uncertainty around participation and financial details

As the program includes the word “voluntary,” its success will depend on how many employees actually opt for it. The company has not disclosed the financial terms, and its success depends heavily on the package value when details emerge on May 7.

A report by Yahoo Finance says healthcare will be a key feature of the financial terms, and employees will have no restrictions on future employment.

Changes to employee stock rewards

Meanwhile, Microsoft is also making changes to the way it gives stocks to its employees as an annual reward. The company will no longer make managers tie stock directly to cash bonuses.

This way, “managers have more flexibility to meaningfully recognize high performance,” Coleman wrote in the memo. This will simplify the review process for managers, allowing them to choose from five pay options for employees instead of nine, CNBC said.

- Ends