Microsoft’s First-Ever Employee Buyout: Here’s What They Could Get

Topline

Microsoft on Thursday began offering voluntary buyouts to thousands of employees in the software giant’s first-ever employee buyout program, and workers will likely receive tens of thousands of dollars as part of their severance package.

The software megacap has ramped up spending on AI in recent years to compete with its peers.

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Key Facts

Microsoft offered buyouts to about 7% of its U.S. workforce on Thursday, according to an internal memo obtained by CNBC and Bloomberg.

Microsoft employed roughly 228,000 people as of June 2025, and of those, 125,000 were in the U.S., according to a Securities and Exchange Commission filing (7% of the U.S. workforce would equal roughly 8,750 employees).

Those eligible for the buyouts include workers at the senior director level and below and employees whose years of employment at Microsoft and age add up to 70 or more.

Shares of Microsoft dropped by more than 4% as of Thursday afternoon, headlining broader losses across software stocks.

Microsoft did not immediately respond to a request for comment from Forbes.

How Much Will Microsoft Pay To Buyout Employees?

Details for the buyouts will be disclosed to eligible employees and their managers on May 7, CNBC reported. Microsoft’s standard severance package previously included 12 weeks of base pay plus two additional weeks for every year of employment, though this could vary depending on tenure and level. When the company laid off 10,000 employees in 2023, Microsoft CEO Satya Nadella said his firm would offer benefit-eligible employees six months of health care and stock vesting and 60 days of notice in addition to severance. If a 20-year employee whose salary totaled $180,000, their severance package would offer $180,000, though it’s likely this would be larger for higher-level workers.

How Does Microsoft’s Severance Package Compare With Other Firms?

When Meta announced it would cut more than 11,000 employees in November 2022, CEO Mark Zuckerberg said in a memo the company would pay 16 weeks of base pay plus two additional weeks for every year of service, in addition to all remaining paid time off, six months of health insurance and three months of career services. As part of a buyout program last year for Google’s human resources department, mid- to senior-level employees reportedly received severances of up to 14 weeks of salary and one additional week for every year of employment. Billionaire Salesforce CEO Marc Benioff told laid-off employees in January 2023 they would receive a minimum of “nearly” five months of pay, health insurance, career resources and “other benefits to help with their transition.”

Key Background

Microsoft plans to increase spending as it develops data center capacity and other AI products, amid reports that the company has struggled to meet demand. Microsoft and its peers—Apple, Meta, Amazon and Alphabet—ramped up capital expenditures by $45 billion last year to $383 billion, and analysts expect the group’s spending to grow by more tan $100 billion in 2026 to nearly $500 billion. Spending is expected to more than double from Microsoft’s $44.5 billion in 2024 to about $98 billion in 2026, and CFO Amy Hood told investors the company would work to balance its spending as it hopes to meet growing demand.