Microsoft employees eligible for the company’s first-ever voluntary retirement program are learning the details of the package Thursday morning, including the size of cash payments, length of healthcare coverage, and vesting of stock awards if they take the company’s offer.
As described in an internal summary viewed by GeekWire, lump-sum cash payments will range from eight weeks to 39 weeks (about nine months) of base pay, depending on level and tenure.
Participants would also receive up to five years of continued access to Microsoft’s medical, dental, and vision coverage for themselves and their dependents. Microsoft would fully subsidize the cost in the first year, with participants paying standard COBRA rates after that. The coverage could end sooner for those who reach Medicare eligibility at age 65.
Unvested stock awards would continue to vest for six months after an employee’s departure, extending to 12 months for those with 24 or more years at Microsoft.
Some longer-tenured employees who meet additional age and service thresholds could qualify for continued vesting of all eligible unvested awards on their original schedule.
Eligible employees have 30 days to decide whether to accept the offer. There are no apparent restrictions on what employees could do after accepting the offer, such as finding other employment.
Announced by the company on April 23, the program is rare in the tech industry, where companies have relied on layoffs, stricter performance reviews, and return-to-office policies to manage headcount. Microsoft itself laid off more than 15,000 employees last year and began requiring Seattle-area workers to return to the office three days a week in February.
An estimated 7% of Microsoft’s 125,000-person U.S. workforce, or roughly 8,750 employees, is eligible for the program, which is open to those at Level 67 and below whose age plus years of service totals 70 or more. Microsoft said it is a one-time offer.
On Microsoft’s earnings call last week, CFO Amy Hood disclosed that the company expects to take a $900 million charge related to the voluntary retirement program in the current quarter. She also said headcount declined year over year and will continue to decline in fiscal 2027.
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