Key Takeaways
- Microsoft is offering buyouts to 60,000 employees to cut costs.
- The offer will provide benefits similar to standard severance packages.
- Microsoft’s headcount has stayed flat since 2022, reaching around 223,000 employees this year.
Two weeks ago, Microsoft presented 60,000 employees, more than a quarter of its workforce, with an enticing offer. They could choose to leave Microsoft of their own accord in exchange for a severance package.
“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support,” chief people officer Amy Coleman said in a memo to workers in late October.
According to a new report from The New York Times, Microsoft employees flocked to an internal website within an hour of the buyout announcement to find out if they had received an offer.
So many workers were checking at once that employees speculated that traffic had overwhelmed the site.
A handful of Microsoft employees who spoke with the Times said that the buyout offer added strain to an already tense relationship between employees and leadership. They said the buyout proposal arrived amid rising pressure to adopt AI, frustration over flat pay and deepening worries about job security.
The voluntary exit offer is the biggest in the company’s history and marks Microsoft’s second buyout this year.
Buyouts compared to layoffs
For Microsoft employees, a buyout means weighing the options. Is the payment enough to make leaving worthwhile?
Workers look at the financial incentive offered by the buyout and weigh it against household expenses, health insurance costs and time needed to find another job. They usually take stock of their savings and consider if they are at risk of layoffs later.
If not enough people choose to accept the offer, Microsoft could resort to layoffs to cut costs. Buyouts are often “a precursor to layoffs,” Lindsay Witcher, a senior executive at career transition firm Randstad RiseSmart, said in an interview with CNBC in 2023.
What the buyout offer promises
A Microsoft spokesperson told Bloomberg that workers who accept this buyout offer will receive benefits similar to a regular severance package.
When Microsoft cut U.S. jobs earlier this year, its severance terms guaranteed at least 60 days of base pay. For most employees, the package topped out at 39 weeks of base pay, with the amount determined by their level and length of service, per Business Insider.
The spokesperson added that the buyout applies to employees on select teams in the U.S., Canada, the U.K and India. Some employees on teams working on data centers, sales and marketing do not qualify for the buyout.
Eligible employees have until the first week of December to decide if they want to accept the buyout, according to GeekWire. Their departures are scheduled for the end of the year, per CNBC.
Microsoft told GeekWire that the buyout is not a sign that it needs fewer workers. Instead, the tech giant said the measure was one way it was adjusting to shifting business priorities.
Microsoft’s workforce numbered 223,000 people at the end of June, according to its annual filings. That headcount has been relatively flat since 2022, when the company started pouring more money into AI and data centers.
Key Takeaways
- Microsoft is offering buyouts to 60,000 employees to cut costs.
- The offer will provide benefits similar to standard severance packages.
- Microsoft’s headcount has stayed flat since 2022, reaching around 223,000 employees this year.
Two weeks ago, Microsoft presented 60,000 employees, more than a quarter of its workforce, with an enticing offer. They could choose to leave Microsoft of their own accord in exchange for a severance package.
“This offer gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support,” chief people officer Amy Coleman said in a memo to workers in late October.
According to a new report from The New York Times, Microsoft employees flocked to an internal website within an hour of the buyout announcement to find out if they had received an offer.