Key points
- About 60,000 Microsoft employees are eligible for buyouts
- Microsoft's offer covers selected teams in four countries
- Microsoft hasn't disclosed costs or expected participation
Microsoft (MSFT) is offering voluntary buyouts to about 60,000 eligible employees, according to a company spokesperson cited by Bloomberg and Business Insider. The program lets workers on selected teams leave with financial support and career planning resources.
That's about 27% of the roughly 223,000 people Microsoft employed full-time as of June 30, by our calculations from its annual report. Microsoft shares were up about 1.1% at $530.20 as of 12:06 p.m. ET on Monday, October 26.
What Microsoft told employees
Amy Coleman, Microsoft's chief people officer, announced the program to employees in a memo the company posted on its blog on Monday. Microsoft calls it a Voluntary Exit Offer. Coleman wrote that it gives employees "who may be considering a future outside the company a new choice to make that transition now with support."
The offer covers eligible employees on participating teams in Canada, India, the United Kingdom, and the United States, at level 70 and below. Microsoft describes it as time-limited and voluntary, with financial support and career planning resources. Not every part of the company is taking part. "Some organizations are providing the Voluntary Exit Offer, and some are not," the memo says. Eligible employees were told to expect an email with their details within a few hours.
Who qualifies and what they get
Level 70 on Microsoft's internal scale includes general managers and some employees with vice president titles, but not corporate vice presidents, according to GeekWire. The company said there's no age or tenure requirement, and performance isn't a factor.
Business leaders decided whether their groups would take part. Microsoft's sales organization isn't participating, and neither are some engineering groups and corporate functions. Data center employees are also excluded.
Microsoft says the package is equivalent to its standard severance. That includes base pay tied to tenure and level, continued stock vesting, health coverage for a fixed period, and career transition services. It doesn't include the extended health coverage that came with the earlier retirement program.
Microsoft ran a buyout program earlier this year too. The memo says the new offer builds on "what we learned earlier this year through the Voluntary Retirement Program." More than 30% of the roughly 8,750 employees eligible for that earlier program accepted it.
When employees have to decide
The public memo calls the offer time-limited but doesn't give a deadline to accept. Employees have until the first week of December to decide. Those who accept will leave on December 31, and Microsoft doesn't have a target for how many will take the offer, according to CNBC. The memo doesn't disclose the program's expected cost. "The Voluntary Exit Offer is new for us. We'll learn from it," Coleman wrote.
Earlier this month, Microsoft denied a report that the head of its core Azure cloud business had told leaders to find cost cuts of at least 20%. Microsoft reports fiscal first-quarter results after the market closes on Wednesday, October 28.
