Microsoft Launches First Voluntary Buyout Program and Restructures Bonus System

Key Facts

1Microsoft announced a one-time retirement program for U.S. employees whose combined age and years of service total 70 or more.

2The company is decoupling stock from cash bonuses in the annual rewards process to give managers more freedom to compensate high-performing employees.

Bloomberg has confirmed Microsoft's first voluntary retirement program, targeting employees whose combined age and service years total 70 or more to reduce the U.S. workforce by 7%. Following the announcement, MSFT shares fell approximately 4% to $415 during Thursday afternoon trading, dropping from a prior close of $432.92 amid concerns over rising AI investment costs. According to CNBC, eligible employees will be notified of specific program details on May 7, with compensation packages estimated at 12 weeks of base pay plus two weeks per year of service. This initiative comes as Microsoft faces pressure from slowing cloud growth and investor anxiety over its reliance on OpenAI. The company is also consolidating Copilot versions and decoupling stock awards from cash bonuses to increase flexibility. These measures aim to optimize operational costs while refocusing resources on high-priority artificial intelligence initiatives.

5 months ago

Version History

3 additional sources confirmed this story

Version 75 months ago

What changed: The story was updated to include a 4% decline in Microsoft shares to $415, noting investor concerns regarding the costs of AI investments.

Version 65 months ago

What changed: Added the May 7 notification date for employees and estimated severance package details.

Version 55 months ago

What changed: Added specific context regarding the stock's underperformance, citing slowing cloud growth and risks associated with the OpenAI partnership as primary drivers.

Version 45 months ago

What changed: Added specific eligibility levels for the buyout (Senior Director and below), reported slow adoption of 365 Copilot, and noted the consolidation of AI product versions under the AI chief.

Version 35 months ago

What changed: The story was updated to identify the strategic driver behind the restructuring as a pivot toward AI initiatives.

Version 25 months ago

What changed: Updated the story to include Bloomberg's confirmation and the specific scale of the program targeting up to 7% of the U.S. workforce.

Version 15 months ago

What changed: The update confirms the historical significance of the event, noting it is the first such program in Microsoft's 51-year history, and identifies CNBC as the original reporting source.