Microsoft launches historic voluntary retirement scheme for long-serving US staff
Approximately 8,750 US workers meeting specific age and tenure criteria can opt for healthcare, cash severance, and accelerated stock vesting in a program affecting about 7% of the workforce.
Microsoft has introduced a voluntary retirement scheme for eligible long-serving employees in the United States, marking the first such initiative in the company's 50-year history. The program targets staff members who meet a specific eligibility threshold, defined as a combined total of age and years of service reaching 70 or more. This initiative is expected to affect approximately 8,750 staff members, representing roughly 7% of the US workforce.
The financial package offered to those who accept the buyout includes five years of healthcare coverage, a cash lump sum calculated based on seniority and tenure, and accelerated vesting for unvested stock options. Regarding medical, dental, vision, and well-being coverage, Microsoft will fully subsidise these costs for the first year. Employees who take the voluntary retirement option will be responsible for paying monthly premiums for the remaining four years.
The cash severance payment varies depending on the employee's level within the organisation. Staff at Microsoft's mid-senior level, designated as level 64, will receive one week of base pay for every six months of regular service, with a maximum cap of 39 weeks. Those holding more senior positions at levels 65 to 67 will be offered two weeks of base pay for every six months of regular service, subject to the same maximum limit of 39 weeks.
In addition to cash and healthcare, the buyout offer includes accelerated vesting for unvested stock options. Standard vesting is set at six months, but this extends to 12 months for employees who have completed 24 or more years of continuous service. The terms of the program were posted on the internal HR website earlier than the planned announcement to employees, giving staff a 30-day window to decide whether to accept the package.
From a financial perspective, the program is expected to incur a $900 million charge for the current quarter. Industry observers note that this one-time cost is roughly equivalent to one day of revenue for the company. While the initiative aims to provide a clear exit path for long-serving staff, the exact number of employees who will ultimately accept the offer remains uncertain as the decision period has only just begun.
