Microsoft offers buyouts to about 60,000 employees: what the Voluntary Exit Offer includes

Microsoft on Monday, Oct. 26, rolled out a new Voluntary Exit Offer (VEO), a time-limited buyout program that lets eligible employees leave the company with financial support and career-planning help.

About 60,000 people are eligible, a Microsoft spokesperson told Business Insider. CNBC put that at roughly 27% of Microsoft’s total workforce of about 223,000.

This article is for information only and is not financial or career advice.

What Microsoft announced

In a memo posted to the official Microsoft blog, Chief People Officer Amy Coleman said the offer “gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support.” She said it also gives participating teams “another way to adapt their workforce to changing needs.”

Key points from the memo:

• Countries: the United States, Canada, India and the United Kingdom.
• Levels: employees at level 70 and below. Microsoft’s levels run from 59 at entry up to 70, which is vice president, according to Business Insider.
• Not company-wide: “Some organizations are providing the Voluntary Exit Offer, and some are not,” Coleman wrote.
• Details by email: eligible employees were told they’d receive their individual offer within hours.

Who is eligible and who isn’t

According to sources who spoke with The Verge, staff in these areas are eligible:

The Verge also reported that Microsoft said on an internal HR site that the offer isn’t based on age, length of service or performance.

What the buyout offers include

Business Insider reviewed specific offers and reported that they are individualized by level, location and tenure, and that US buyouts line up with Microsoft’s standard US severance:

• Levels 64 and below: one week of base pay per six months of service.
• Levels 65 to 67: two weeks of base pay per six months of service.
• Continued regular stock vesting (six or 12 months for levels 67 and below, based on years of service) and health insurance.
• Standard severance is capped at 39 weeks of base pay for levels 67 and below; level 68’s standard offer includes 12 months of salary.

Key dates

Employees must decide in early December, and those who accept will leave on Dec. 31, CNBC and Business Insider reported. A Microsoft spokesperson told Business Insider there are no plans for another buyout at this time, though The Verge said Microsoft’s internal note left the door open to a future offer “where there is a business and workforce need.” CNBC’s source said Microsoft has no participation target.

Why Microsoft is doing this

CNBC tied the move to Microsoft’s heavy spending on AI data centers. The company said in July that capital expenditures for the September quarter should exceed $50 billion, up from $34.9 billion a year earlier.

It follows other workforce moves this year:

1. April: a first-ever voluntary retirement program, open to about 7% of US employees (roughly 9,000 people). More than 30% of those eligible took it, Microsoft said in July.
2. July: plans to lay off 4,800 employees, mostly in Xbox and commercial sales, per The Verge.
3. October: the much broader Voluntary Exit Offer.

The Verge also cited a Fortune report that Xbox CEO Asha Sharma is planning new rounds of layoffs.

What’s next for MSFT

Microsoft is scheduled to report quarterly results on Wednesday, Oct. 28, CNBC noted, which could bring more detail on costs and headcount.

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