Microsoft is rolling out voluntary buyouts for some of its U.S. employees, a first for the 51-year-old tech giant as it adjusts to the rapid advancements in artificial intelligence.
This one-time retirement program is open to eligible workers at the senior director level and below who have a combined age and years of service totaling at least 70.
About 7 percent of Microsoft's U.S. workforce meets this criterion, as per a source familiar with the situation. Employees will receive detailed information on May 7, but those on sales incentive plans won't qualify.
This initiative comes as Microsoft increases its spending on data centers to meet the rising demand for AI-driven cloud services, a trend that's also being seen in companies like Alphabet and Amazon.
At the same time, the software industry as a whole is facing challenges, especially with new AI coding tools from firms like Anthropic potentially upending traditional business models.
Microsoft has already taken measures to reduce expenses, including several rounds of layoffs last year. By June 2025, the company had around 228,000 employees worldwide, with roughly 125,000 in the U.S.
Besides the buyouts, Microsoft is also adjusting its employee compensation structure. Managers won't have to tie stock awards directly to cash bonuses anymore, giving them more flexibility to recognize performance. Plus, the company is simplifying its performance review system, cutting the number of pay options for managers from nine to five.
These changes underscore Microsoft's ongoing efforts to streamline operations and shift resources as it prepares for long-term growth in the AI age.
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