For the first time: Microsoft will offer voluntary retirement to thousands of employees in the US

According to estimates, approximately 7% of the company’s workforce in the US will be eligible to participate in the program – approximately 8,700 employees out of approximately 125,000. According to reports, the program was presented in an internal memo by the company’s VP of Human Resources, Amy Coleman, who described it as a one-time offer intended for veteran employees, some of whom have worked at the company for many years and even decades.

Eligibility will be determined according to a formula that combines the employee’s age with his years of seniority in the company, so that the sum of age and years of seniority together must reach at least 70.

Is this a wave in the field?

Voluntary retirement programs have for years been an accepted tool in traditional industries, but less common among large technology companies, which preferred direct layoffs or stricter performance policies to reduce personnel. Microsoft itself laid off more than 15,000 workers in the past year, and at the same time began requiring some workers in the Seattle area to return to work from the office three days a week.

However, in the last year there has been a certain shift in the technology sector as well. More companies are incorporating voluntary retirement plans as part of efficiency and organizational change processes, among other things against the backdrop of growing investments in artificial intelligence and the need to adjust the workforce structure.

Thus, during 2025 and at the beginning of 2026, Google offered several rounds of voluntary retirement plans for employees in various divisions, including sales, advertising and engineering, with the aim of allowing employees who do not wish to integrate into the company’s new directions to retire under preferential conditions.

Intel also incorporated similar routes as part of its broad efficiency plan, which included a cut of approximately 15% of the workforce, with an emphasis on veteran employees and benefits such as accelerating stock vesting and expanding health coverage. In addition, at Cisco it was reported this month that thousands of employees left as part of a voluntary retirement program as part of a restructuring, and similar moves were also registered at other companies, including LG Display.

Changes in rewards

At this stage, the company has not published the full details of the retirement package, and stated that additional information will be provided to employees and managers on May 7. The program is intended for employees at Level 67 and below, which corresponds to a senior management level (Senior Director), and does not apply to employees in sales positions who benefit from dedicated compensation plans.

One of the key elements is expected to be health insurance, especially for workers who have not yet reached the age of 65 and are not yet eligible for Medicare insurance in the United States. It was also noted that there are not expected to be any restrictions on the future employment of employees who choose to join the program.

At the same time, Microsoft announced a change in the compensation structure for employees. The company will simplify the salary scales and reduce the number of compensation options from nine to five. In addition, the direct relationship between stock grants and cash bonuses will be severed, so that managers will be given greater flexibility in determining the compensation package.

The plan is expected to come into effect in the fourth quarter of Microsoft’s fiscal year, and the company’s management is expected to refer to it as part of the upcoming investor call after the publication of the reports.