Microsoft has launched its first voluntary retirement programme in the US, marking a major shift in how the company manages its workforce. The plan is aimed at employees whose age and years of service together add up to 70 or more. This means, for instance, someone aged 50 with 20 years at Microsoft or aged 55 with 15 years could qualify. Around 7 per cent of the US workforce—nearly 8,750 employees—are eligible.
The package includes several benefits. Healthcare support is one of the biggest highlights, with full coverage for medical, dental, vision, and wellness expenses during the first year. For the next four years, employees can continue coverage by paying a monthly premium. Cash payouts are also part of the deal, calculated based on seniority and years of service. Mid level employees can receive up to 39 weeks of pay, while senior staff may get double that rate per service period, capped at the same limit. Stock benefits are included too, with six months of vesting for unvested awards, and up to 12 months for those with 24 years or more at the company.
Employees have 30 days to decide whether to accept the offer. Microsoft expects to take a one time charge of about $900 million for the programme, roughly equal to a single day of its revenue.
The move comes after multiple rounds of layoffs last year, but unlike those cuts, this programme allows employees to leave on their own terms with financial and healthcare support. Alongside the retirement plan, Microsoft is also simplifying performance reviews and giving managers more flexibility in rewarding high performers.