Just as a number of tech companies are laying people off to adapt to the changes brought in by Artificial Intelligence (AI), tech giant Microsoft is reportedly planning its first ever voluntary retirement buyout for its employees, according to a memo. Microsoft has never previously done buyouts of this scale.
Like other US tech giants, Microsoft has been spending aggressively on artificial intelligence. But adoption of one of its flagship AI services, the 365 Copilot, has reached just slightly over 3 per cent of its total 450 million 365 customers.
What is the one-time retirement program?
The one-time voluntary retirement plan, some eligible employees in the United States will be given the option to retire early.
About 7 per cent of the US workforce will be eligible for the buyouts. As of June 2025, the company had 125,000 employees in the US. If that number if taken today, as many as 8,750 Microsoft workers will be eligible for the voluntary retirement program.
Who will be eligible for one-time voluntary retirement?
The one-time retirement program will be open to US workers at the senior director level and below, with a combined age and years of employment of 70 or more, CNBC had reported.
This means that you add your age with the number of years you have worked at Microsoft. If the final number crosses 70, then you are eligible for a buyout.
“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” Amy Coleman, Microsoft’s executive vice president and chief people officer, wrote in the memo, the report mentioned.
It excludes some senior roles or those on sales incentive plans, according to the memo from Chief People Officer Amy Coleman.
Microsoft has instituted massive layoffs that have hit in recurring rounds since early 2023. Other top AI spenders like Oracle Corp. and Meta Platforms Inc. have done similarly sweeping cuts over the last year. Meta has recently announced that it would be laying off about 8,000 workers, or about 10 per cent of its workforce.
The company is planning further layoffs in the later half of the year. The details of the layoffs, including date and size, were not yet settled.
Earlier Thursday, Microsoft announced it would spend $18 billion on AI cloud and infrastructure in Australia, its biggest-ever investment there, after previously committing $10 billion over four years for AI in Japan.
(With Reuters, Bloomberg inputs)
