Microsoft has finally disclosed the specifics of its voluntary retirement program, offering a combination of healthcare coverage, cash severance, and accelerated stock vesting for long-serving US employees who choose to leave. The terms were initially scheduled to go live on Wednesday, but according to The Verge, the company posted them on its internal HR website a day earlier than planned.
First Voluntary Retirement in Microsoft's History
This marks the first voluntary retirement program in Microsoft's 51-year history. The company announced last month that it would take a $900 million charge in the current quarter to fund the buyouts. Approximately 7 percent of Microsoft's US workforce, or roughly 8,750 employees, are eligible. The eligibility formula is simple: add your age to your years of service, and if the total is 70 or more, the offer is on the table. Employees have 30 days to decide.
Healthcare Coverage Details
The medical component is a key benefit for those retiring before reaching Medicare age. Microsoft is offering five years of medical, dental, vision, and well-being coverage. The first year is fully subsidized by the company. For the remaining four years, employees will pay a monthly premium themselves. This distinction is significant; a 55-year-old leaving today still has a decade before Medicare eligibility at 65, and the cost of bridging that gap will depend on the premiums Microsoft sets for those four years.
Cash Severance Based on Seniority
The lump sum payout varies by employee level. Mid-senior employees at level 64 receive one week of base pay for every six months of regular service, capped at 39 weeks. Senior employees in levels 65 through 67 receive double—two weeks of base pay for every six months of service, also capped at 39 weeks. For example, a level 65 employee with about 10 years at the company would max out the cash payment, while a level 64 with the same tenure would receive around 20 weeks. These details were drawn from Microsoft's internal HR posting, which went live ahead of schedule.
Stock Vesting Acceleration
Microsoft is also accelerating six months of unvested stock for participants. Employees with 24 or more years of continuous service receive double—a full year of additional vesting. This tier is small but meaningful, designed for those who joined Microsoft in the early 2000s and stayed through the Ballmer years, the cloud pivot, and the AI buildout.
Context and Exclusions
The offer comes after more than 15,000 layoffs last year and a wave of executive departures in 2026, suggesting Microsoft aims to reduce its workforce ahead of the new fiscal year in July without another round of cuts. Employees at senior director level or above are excluded from the buyout, as are those on sales incentive plans.
