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Microsoft Offers Its First Ever Buyouts to Shape Workforce Around AI Push
Microsoft is offering voluntary buyouts to long-tenured employees for the first time as it restructures around AI, signaling major organizational pressure despite its early OpenAI advantage.
What: Microsoft is launching its first-ever voluntary retirement program for eligible long-tenured U.S. employees (roughly 7% of staff), requiring senior directors or below whose age plus years of service equals at least 70, as part of broader changes to performance systems and compensation.
Why it matters: Despite Microsoft's early lead through its OpenAI investment, the company's stock has dropped nearly 20% over six months due to concerns about its dependence on OpenAI, struggles building proprietary AI models, and questions about AI infrastructure costs, prompting rapid leadership reshuffling and workforce changes following 15,000+ layoffs last year.
Deep dive
- Microsoft is offering voluntary buyouts to approximately 7% of its U.S. workforce (roughly 8,750 employees out of 125,000 U.S. staff as of June 2025)
- Eligibility requires employees to be at senior director level or below, with combined age and years of service totaling at least 70
- The program coincides with changes to how Microsoft awards stock compensation, which will no longer be directly tied to bonuses
- Microsoft's stock has declined nearly 20% over the past six months despite the company's major investment in OpenAI
- Key concerns driving the decline include dependence on OpenAI, difficulties building proprietary AI models, and industry-wide worries about AI data center costs versus returns
- CEO Satya Nadella has reshuffled leadership extensively, including creating a unified Copilot team under Jacob Andreou in March 2026
- Mustafa Suleyman, hired as Microsoft AI CEO in 2024, saw his responsibilities narrowed to focus specifically on proprietary AI models
- Notable 2026 departures include Rajesh Jha (38-year veteran, EVP of experiences and devices) and Phil Spencer (38-year gaming CEO)
- The company laid off more than 15,000 employees in 2025 across sales, Xbox, and other departments
- Microsoft's Copilot AI products have faced challenges with consumer confusion and interoperability issues
- The voluntary retirement program is positioned as part of efforts to "simplify to move faster" according to Chief People Officer Amy Coleman
Original article
Microsoft is offering long-tenured employees voluntary buyouts. The voluntary retirement program is part of a broader shift by the company to alter its performance system and how it awards bonuses and stock options. It is only being offered to a small percentage of long-serving employees in the US. To be eligible, employees must be at a senior director level or below, and their years of employment and age must add up to at least 70.
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