Microsoft released details of its buyout offer for long-serving employees in an internal document viewed by Business Insider.
Microsoft last month announced it would offer buyouts to employees at level 67 and below in the US who have 70 or more years of age and service. Microsoft said it would share the details with employees on May 7.
The buyout offer helps Microsoft cut costs as it plans significant spending, including $190 billion in capital expenditures this year, primarily related to its AI infrastructure buildout. The company recently said it expects head count to decrease in the coming quarters.
Business Insider obtained a full copy of the document, an internal explanation of the so-called Voluntary Retirement Program (VRP). According to the document, eligible employees who take the buyout will receive:
- A lump-sum cash payment equal to a minimum of eight weeks and a maximum of 39 weeks of base pay, based on seniority and tenure. Employees levels 64 and below will receive one week of base pay per six months of service, and employees levels 65 to 67 will receive two weeks of base pay per six months of service.
- Up to five years of insurance coverage, including medical, dental, and vision for the employee and their dependents. Microsoft pays for the first year.
- Continued regular stock vesting for six or 12 months, based on years of service.
- Continued retirement stock vesting for employees who meet certain requirements.
- Last day of employment July 1.
Employees with less than 24 years of service will receive six months of unvested stock awards after their employment ends. That vesting period will expand to 12 months for employees with more than 24 years of service.
The document states Microsoft has no plan to offer another voluntary retirement program in the future.
Read the full details of Microsoft’s buyout package (edited for length and clarity):
“What is included in the VRP Benefits Package? … VRP extended healthcare VRP participants may be eligible for up to 5 years of continued post-employment access to Microsoft medical, dental, vision, and Wellbeing at Microsoft coverage for themself and their eligible dependents. Year 1: Microsoft subsidized Years 2-5: VRP participants will pay a monthly premium Coverage may end sooner than 5 years from termination date, depending on personal circumstances and timing, including eligibility for Medicare or other coverage options. Cash Lump Sum payment A lump sum cash severance payment payable following termination of employment equal to the following: For employees at Levels 64 and below: One (1) week of base pay for every 6 months of regular service to Microsoft, with a minimum of 8 weeks and a maximum of 39 weeks. For employees at Levels 65-67: Two (2) weeks of base pay for every 6 months of regular service to Microsoft, with a minimum of 8 weeks and a maximum of 39 weeks. Continued Stock Award vesting 6 months of continued scheduled vests of unvested stock awards following the termination date. This 6-month continued vesting period will be extended to 12-months if the VRP participant has 24 years or more of continuous service. Stock plan retirement If the VRP participant’s most recent date of hire was before August 1, 2023, and if their unvested stock award provides for continued vesting following an eligible “Retirement,” and if on their termination date they are either (1) age 64, or (2) within one year of attaining age 55 with 15 years of continuous service, then they will be treated as meeting the age and service requirements for Retirement under the award agreement(s) for any and all unvested stock awards. This will result in continued scheduled vesting of any unvested stock awards that were granted more than one year before their termination date and are eligible for Retirement vesting under the terms of the award agreements (generally non-SSA awards). All other requirements for Retirement set forth in the award agreement(s) must still be met. What are the actions & timeline for VRP? This one-time program has specific and fixed timeline as shown here. … [Business Insider removed some administrative deadlines here for length and clarity] July 1: Last day of Microsoft employment for VRP participants. July 2: Microsoft employment termination date for VRP participants. Will VRP be offered again in the future? We understand why people ask this question—it’s natural to want clarity when you’re thinking about your future. At this time, there is no plan or commitment to offer another voluntary retirement program. This is a unique one-time action. How does the VRP impact employees who are not eligible? The VRP is a one-time, voluntary program for eligible employees. If you are not eligible, you may experience changes on your team if colleagues elect to retire from Microsoft with VRP. Eligibility for VRP does not influence how decisions are made regarding other workforce changes. Organizational and workforce decisions continue to be based on business priorities and needs and are not determined by VRP eligibility. Who is eligible for the VRP and how was eligibility determined? Eligibility is based on objective, predefined criteria applied consistently across the US employee population and finalized prior to the program launch. Managers and leaders do not determine eligibility. To be eligible for the VRP, employees must have met these requirements:
- Microsoft employees on US Payroll at Level 67 or below who are not on a sales and services incentive plan (namely a S, T, D, V, M, or P (other than P2) Plan); and
- Employees whose age + years of service (as of June 30, 2026), each rounded to the nearest whole number, equals 70 or more (Rule of 70).
For this purpose, years of service will include non-continuous service with Microsoft as well as continuous service as an employee of an acquired company immediately prior to and continuing through the date of the acquisition by Microsoft or a subsidiary. Any service before a break in employment with an acquired company, prior to the acquisition by Microsoft or a subsidiary, will not be included. Employees must also be active or on approved leave and in good standing (have not resigned or been notified of an involuntary separation) and remain in good standing through their separation date of July 2, 2026. Why are there eligibility exclusions? This program was designed very intentionally around a narrow population where both tenure and role structure aligned with a one-time retirement offering funded within this fiscal year. Roles on sales incentive plans have fundamentally different compensation structures and fiscal commitments, which made inclusion in this program not viable. In addition, individuals who have previously been notified of a job elimination and have not yet separated employment as a result (for example, their termination date has not passed yet or they are on a leave of absence) are not eligible for VRP. This very small population is already eligible for severance benefits and therefore will not be eligible for VRP. Why is this program only available to US employees? The VRP is limited to US employees for a few reasons: First, the largest number of employees who meet the program criteria are based in the US, so this is where the program would have the greatest impact. Second, the design of the package reflects US-specific realities — particularly around healthcare. Across the US, more than a few employees delay retirement primarily because of uncertainty around their healthcare coverage until eligibility for Medicare, which is the US government program assuring coverage for Americans at a certain age. A key feature of the VRP is extended healthcare coverage access geared towards helping employees mitigate or even close this gap. Finally, the complexity of designing and delivering this first-of-a-kind program led us to concentrate on a single-country rollout.”
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