Microsoft offers voluntary buyouts for first time in 51 years

Microsoft announced Thursday it will offer voluntary buyouts to a small percentage of its U.S. workforce, the first time in the company's 51-year history that it has offered such a program. The one-time retirement benefit applies to employees at the senior director level and below whose combined years of service and age total 70 or more, according to a memo from Chief People Officer Amy Coleman viewed by CNBC and Reuters. Eligible employees and their managers will receive details on May 7, though those with sales incentive plans cannot participate. The company had 228,000 employees as of June 2025, and this move appears designed to reduce costs while potentially avoiding larger layoffs ahead of Microsoft's new financial year in July. "Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Coleman wrote. Microsoft is also adjusting its stock award system, eliminating the requirement that managers tie stock grants directly to cash bonuses, which the company says will give managers more flexibility to recognize high performance. Additionally, Microsoft is simplifying its review process by reducing pay options from nine levels to five for managers. The announcement comes as Microsoft ramps up capital spending on data centers to supply cloud clients with computing power for generative AI models, with technology peers like Alphabet and Amazon doing the same. Software stocks have been under pressure as AI coding tools from companies such as Anthropic threaten to disrupt established businesses. Last year, Microsoft removed some costs through multiple rounds of layoffs.