Microsoft is offering voluntary buyouts to long-tenured employees in the U.S. for the first time, as it restructures its workforce to accelerate its push into artificial intelligence.
According to a report by The Wall Street Journal, the move is part of a broader overhaul that also includes changes to performance reviews, bonuses, and stock-based compensation.
The buyouts, described internally as a “voluntary retirement program,” were outlined in a memo from Chief People Officer Amy Coleman.
“Across the company, we’re looking at where we can simplify to move faster and deliver the solutions our customers count on,” Coleman wrote. “To sustain this pace, we have to stay focused on doing great work, trusting and empowering our managers, and simplifying to support everyone.”
The program will apply to a small share of employees. Roughly 7% of Microsoft’s U.S. workforce is eligible, according to a person familiar with the matter. To qualify, employees must be at the senior director level or below, and their age plus years of service must total at least 70.
A deeper shift beyond layoffs
The buyouts signal a more structural shift inside Microsoft, rather than a one-off cost-cutting move.
The company is also changing how it distributes stock awards, with equity no longer directly tied to bonuses. This reflects a broader attempt to rethink incentives as the company reorganises around AI.
Microsoft had about 125,000 employees in the U.S. as of June 2025.
AI pressure is forcing internal change
The changes come as Microsoft races to strengthen its position in the AI market.
While the company gained early momentum through its partnership with OpenAI, it has faced growing pressure in recent months. Its stock has fallen nearly 20% over the past six months, amid concerns about its reliance on OpenAI, difficulties building its own AI products, and the rising cost of AI infrastructure.
Internally, the company has been reshuffling leadership and consolidating teams tied to its AI strategy.
Chief executive Satya Nadella has made several changes, including leadership shifts across Copilot, gaming, and enterprise divisions.
Leadership shakeups and product challenges
Microsoft has also been reorganising key product units.
The company recently created a unified Copilot team led by Jacob Andreou, while narrowing the role of Mustafa Suleyman to focus on proprietary AI models.
Other high-level changes include:
- Phil Spencer stepping down after decades at the company
- Rajesh Jha announcing his retirement
- Asha Sharma taking over leadership in gaming
- Dan Shapero being named CEO of LinkedIn
These changes follow more than 15,000 layoffs across the company last year.
David Adubiina
