Microsoft’s New Voluntary Retirement Package for Long-Term Employees

Microsoft recently announced plans to allow long-term employees in the US to opt for voluntary retirement. Although the details were set to be shared with staff tomorrow, sources indicate that the information has already been made available on the company’s internal HR site.

Employees in the US who have a combined total of age and years of service of 70 or more will qualify for this retirement option. The package includes five years of access to Microsoft’s healthcare benefits, a lump sum cash severance, and six months of vesting for unvested stock options.

For the first year, Microsoft will fully cover the costs of medical, dental, vision, and well-being coverage, but those who choose the voluntary retirement will need to pay a monthly premium for the subsequent four years.

The cash severance will differ based on employee levels. Mid-senior level employees (level 64) will receive one week of base pay for every six months of service, capped at 39 weeks. Those in more senior roles (levels 65–67) will receive two weeks for every six months of service, also up to a maximum of 39 weeks.

Additionally, the buyout offer includes six months of vesting for unvested stock options, which can extend to 12 months for employees with 24 or more years of continuous service.

Approximately 7 percent of Microsoft’s US workforce, or about 8,750 employees, will be eligible for this buyout, marking the first time in the company’s 50-year history that such a program has been offered. Employees will have 30 days to decide whether to accept the package.

Microsoft has stated that it will incur a $900 million charge in the current quarter for this one-time program, which is roughly equivalent to a day’s revenue for the company.