Microsoft is offering voluntary buyouts to thousands of longtime US employees

• Up to 7% of Microsoft’s US workforce, or about 8,750 people, could qualify for voluntary buyouts.
• Microsoft says the program is about giving people more options if they want to retire.
• The buyouts provide a way to trim its workforce without needing to conduct layoffs.

Microsoft is offering one-time buyouts to long-serving employees in the US, according to an email obtained by Business Insider.

The move could affect up to 7% of its US workforce of 125,000 people, or about 8,750 people, according to a person familiar with the matter.

The tech giant says it’ll provide buyouts to people who want to retire and whose years of service, plus their age, add up to 70 or more. For example, a 58-year-old who has worked 12 years at Microsoft would qualify.

That amounts to “a small percentage of our US employees,” Microsoft’s chief people officer Amy Coleman wrote in the email. The program excludes some very high-ranking employees and some who work in sales.

The buyouts allow the company to trim its workforce without needing to conduct high-profile layoffs. Microsoft has undergone several rounds of layoffs in recent years.

Tech companies are under pressure to reduce their head count because of AI. The fintech company Block cut 40% of its entire workforce in February, citing AI. Meta is also laying off 10% of its staff next month.

Microsoft’s email did not mention AI, saying that the company is offering more options for people who may want to retire.

Microsoft is also overhauling its pay and rewards system to better recognize high performers and make expectations clearer, the email said. The company is moving away from tying stock awards to bonuses, giving managers more flexibility to reward top staff.

Microsoft has been pouring billions into AI to compete with other tech giants like Google and is set to spend close to $100 billion in capital expenditures this year, according to a Business Insider analysis.

Microsoft declined to comment.