Microsoft plans first-ever voluntary employee buyout for up to 7% of U.S. workforce

Microsoft will offer voluntary buyouts to some U.S. employees, a first for the 51-year-old software giant, as the tech industry grapples with major changes sparked by the artificial intelligence boom.

About 7% of U.S. employees are eligible, according to a person familiar with the plans who asked not to be named because the number isn't being made public. The one-time retirement program, announced in a memo on Thursday, will be available to U.S. workers at the senior director level and below whose years of employment and age add up to 70 or higher.

Eligible employees and their managers will receive details on May 7. Those with sales incentive plans cannot participate.

Microsoft has been ramping up capital spending on data centers to supply cloud clients with computing power that can handle generative AI models. Technology peers such as Alphabet and Amazon are doing the same. Meanwhile, software stocks are getting hammered as coding tools from Anthropic and others threaten to disrupt established companies.

Last year Microsoft removed some costs through multiple rounds of layoffs. As of June 2025, the company had 228,000 employees, with 125,000 in the U.S.

"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Amy Coleman, executive vice president and chief people officer at Microsoft, wrote in a memo viewed by CNBC.

Additionally, Microsoft is adjusting the way it doles out stock to employees for annual rewards. The company will no longer make managers tie stock directly to cash bonuses.

This way, "managers have more flexibility to meaningfully recognize high performance," Coleman wrote.

Microsoft is also simplifying the review process for managers, so they can choose from five pay options for employees instead of nine.