Microsoft introduces a "soft" cutback: 7 % of employees will receive early retirement.

Microsoft Announces a New Early Retirement Program

The American technology giant plans to offer 7 % of its U.S. employees the option to leave the company earlier than standard termination rules allow.

- Who is eligible?

Employees at the level of “no higher than senior director” who have reached an age and tenure combination of at least 70 years (age + service).

- When does it start?

Starting May 7, 2025, Microsoft will begin sending out invitations.

- What do they receive?

For early career termination, employees will receive “additional incentive payments”—the exact amount has not yet been disclosed but will include both a cash bonus and stock.

Microsoft has long been optimizing its workforce. As of June 2025, the company had 228,000 employees, of which 125,000 worked in the United States. This is the first time in Microsoft’s 51‑year history that it is using this method to reduce staff.

Changes to Compensation Packages
Alongside the early retirement program, Microsoft is revising compensation terms for remaining employees:

- Flexibility – the link between the size of the equity package and cash payouts is no longer fixed.

- Simplification – instead of nine incentive options, managers will have only five available, which should simplify decision‑making.

Thus, the company aims to cut personnel costs while offering more flexible and attractive terms for those who choose to stay.