Microsoft’s first ever voluntary US buyout targets older senior staff as the software giant reshapes costs in the AI era
Microsoft is inviting a slice of its US workforce to exit as it leans harder into artificial intelligence and contends with a sharp share-price pullback.
According to CNBC, the company plans the first voluntary employee buyout in its 51‑year history.
The one‑time retirement offer will apply to US staff at the senior director level and below whose age and years of service add up to 70 or more.
Employees on sales incentive plans will not qualify, and eligible workers and their managers will get details on 7 May.
The same outlet reported that about 7 percent of Microsoft’s US employees fall into the eligible group.
The move follows multiple rounds of layoffs last year and comes as Microsoft continues to remove costs.
As of June 2025, Microsoft employed 228,000 people worldwide, including 125,000 in the US.
Amy Coleman, executive vice president and chief people officer, said the program is meant to give qualifying staff a measure of control over their next move.
“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” she wrote in a memo cited by the outlet.
Microsoft has been pouring money into data centres to serve cloud clients running generative AI models, CNBC reported, while peers such as Alphabet and Amazon are also boosting AI-related infrastructure spending.
Yet adoption of one of Microsoft’s flagship offerings, 365 Copilot, has reached just slightly over 3 percent of its roughly 450 million 365 customers, according to Reuters.
Investors have started to question that AI trajectory.
Reuters said slowing growth in Microsoft’s cloud unit, combined with concern over its heavy reliance on OpenAI, has turned the stock into one of the weaker Big Tech performers this year.
Shares fell nearly 24 percent from January to March, marking the biggest quarterly drop since 2008.
On the product and leadership side, Microsoft in March merged the commercial and consumer versions of Copilot and put AI chief Mustafa Suleyman in charge of building new AI models, where analysts say the company has fallen behind competitors.
Reuters added that this forms part of broader changes at the company, including CEO Satya Nadella’s October decision to hand some marketing and operations oversight to Judson Althoff, CEO of Microsoft’s commercial business, to sharpen Nadella’s focus on AI.
Internally, Microsoft is also overhauling incentives.
According to CNBC, the company is changing how it hands out stock for annual rewards, so managers no longer have to link stock awards directly to cash bonuses.
Coleman wrote that the update gives “managers more flexibility to meaningfully recognize high performance.”
Microsoft is also simplifying its review system by cutting the number of pay options managers can choose from nine to five, according to both sources.
Microsoft declined to comment on the buyout plan when contacted, Reuters said.
