Microsoft plans first voluntary retirement program for U.S. employees

microsoft The company is offering voluntary buyouts to some of its U.S. employees as the technology industry faces major changes sparked by the artificial intelligence boom. This is a first for the 51-year-old software giant.

About 7% of U.S. employees will be affected, said a person familiar with the plan, who asked not to be identified because the numbers have not been made public. The one-time retirement program, announced in Thursday’s memo, is available to U.S. workers below the senior director level who have combined years of service and age 70 years or older.

Eligible employees and their managers will be notified of further details on May 7th. Those with a sales incentive plan cannot participate.

Microsoft is ramping up capital investment in data centers to provide cloud customers with the computing power to process generative AI models. technology peer alphabet and Amazon is doing the same thing. Meanwhile, software stocks have been hurt as coding tools like Anthropic threaten to disrupt incumbents.

Last year, Microsoft cut some costs through multiple rounds of layoffs. As of June 2025, the company had 228,000 employees, 125,000 of whom were in the United States.

“Our hope is that this program will give eligible people the option to take the next step on their own terms with generous company support,” Amy Coleman, Microsoft’s executive vice president and chief human resources officer, said in a memo seen by CNBC.

Additionally, Microsoft is adjusting the way it distributes stock as annual compensation to employees. The company will no longer directly link stock and cash bonuses to executives.

In this way, “managers have more flexibility to meaningfully recognize high performance,” Coleman writes.

The company is also simplifying the review process for managers, allowing employees to choose from five pay options instead of nine.

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