This would be the first ever voluntary buyout of eligible (tenured) employees. The company has approximately 125,000 employees based in the U.S. (228,000 worldwide); this 7% would represent around 8,750 workers in the U.S.
The company has been taking heat recently due to its AI initiatives with Copilot, plus their 2025 layoffs which totaled around 15,000 personnel (while raking in record profits). I ended up selling all of my MSFT after those 2025 layoffs were announced.
Similar to Meta’s recent layoffs as a result of AI, this initiative is part of Microsoft’s strategy with managing costs while increasing their investments in artificial intelligence infrastructure (capital expenditure for data centers). In this case, Microsoft is offering an early retirement buyout of which the details are yet to be disclosed.
Microsoft’s standard severance package included at least 12 weeks of base pay plus two additional weeks for every year of employment (position and tenure could vary that period). Six months of health benefits and the vesting of employee stock options was also offered to benefits eligible employees in previous reductions in force in 2023 and 2025.
Considering the companies recent record revenues/profits, offering some of that as incentives on top of their standard severance, comes across at least looking/sounding better in terms of PR. But if not enough take this offer, the company will still move through with actual layoffs to get the headcount to where they want it to be.
