Microsoft offers buyouts to long-serving employees
▼ Summary
– Microsoft is offering a one‑time Voluntary Retirement Program to long‑serving US employees for the first time in its history.
– Eligibility requires a combined age and years of service total of 70 or more, with “generous company support” provided.
– The program applies to only a small percentage of US employees and may help avoid larger layoffs before the new financial year.
– Microsoft is simplifying its rewards program, reducing pay points from nine to five levels and removing the curve system.
– Stock awards are being decoupled from bonuses, giving managers more flexibility to reward high performance and retain talent.
For the first time in its more than five-decade history, Microsoft is offering a voluntary retirement program to its long-serving US employees. The initiative, announced alongside changes to the company’s annual rewards and performance systems, targets a select group of tenured staff who may be ready to move on from the tech giant.
“Many of these employees have spent years, and in some cases, decades, shaping Microsoft into what it is today,” wrote Amy Coleman, Microsoft’s HR chief, in an internal memo reviewed by The Verge. “For those who may be considering their next chapter, we’re offering a one‑time Voluntary Retirement Program.” The company emphasized that the program applies only to a “small percentage of our US employees.”
Eligibility is determined by a formula that combines an employee’s years of service with their age, requiring a total of 70 or more. Coleman described the package as including “generous company support,” though exact terms were not disclosed. While it remains unclear whether this move signals broader layoffs, the timing suggests it could be a strategy to avoid a larger round of cuts before Microsoft’s new fiscal year begins in July.
In tandem with the retirement offer, Microsoft is overhauling its employee rewards structure. The company is simplifying its performance-related bonuses and stock awards, reducing pay points from nine levels to five. Crucially, there is no curve involved in the new system, which means Microsoft is not returning to the widely disliked stack ranking model.
“We’re also changing how stock is awarded, moving away from it being directly tied to bonus, so managers have more flexibility to meaningfully recognize high performance,” Coleman added. This shift could prove critical in retaining top talent, especially as Microsoft has faced a wave of executive departures in recent months. By decoupling stock grants from the bonus schedule, managers now have more freedom to reward standout contributions with additional equity.
(Source: The Verge)
