Microsoft is offering voluntary buyouts to U.S. employees for the first time in its 51-year history, a move that comes as the software giant's stock suffers its worst quarterly drop since 2008 and its marquee AI product struggles to find buyers.
About 7% of Microsoft's U.S. workforce is eligible for the one-time retirement program, according to a person familiar with the plans. That would cover roughly 8,750 of the company's estimated 125,000 American employees, based on June 2025 headcount data. The buyout targets workers at the senior director level and below whose combined years of employment and age reach at least 70. Eligible employees and their managers will receive details on May 7.
"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, wrote in an internal memo obtained by CNBC and Bloomberg. The packages are expected to be substantial. Comparable buyouts in tech have offered severances reaching six figures: Google's HR department program last year gave mid- to senior-level workers up to 14 weeks of salary plus an extra week per year of service. A Microsoft employee with 20 years at a $180,000 salary could see roughly $180,000 in severance under Microsoft's own standard formula of 12 weeks of base pay plus two additional weeks per year of service.
Microsoft also announced it will change how it distributes stock to employees for annual rewards. Managers will no longer be required to tie stock directly to cash bonuses, giving them more flexibility "to meaningfully recognize high performance." The buyout program lands during a brutal stretch for Microsoft shares. The stock tumbled nearly 24% from January through March, the biggest quarterly decline since October 2008, as slowing cloud unit growth and investor unease about the company's heavy reliance on OpenAI rattled Wall Street.
Adoption of Microsoft 365 Copilot, one of the company's flagship AI services, has reached just over 3% of its total base of roughly 450 million Microsoft 365 customers. The low uptake puts pressure on CEO Satya Nadella's bet that generative AI will drive the next wave of revenue growth.
Meanwhile, Microsoft continues pouring capital into AI infrastructure. Spending is expected to more than double from $44.5 billion in fiscal 2024 to roughly $98 billion in fiscal 2026 as the company races to build data center capacity for cloud clients running generative AI workloads.
