Microsoft Offers Older Workers Up to 39 Weeks' Pay and Five Years of Healthcare to Retire Early Amid $190B AI Push

Details on Microsoft's first-ever Voluntary Retirement Program (VRP) are now out, revealing what long-serving employees would be getting. The remuneration that each employee would be getting would depend on their length of service and level.

A look at an internal document viewed by Business Insider shows what eligible employees would be getting. The VRP package includes health coverage, cash severance and a partial stock vesting bump for long-serving Microsoft employees. Below are some of the details of the buyout employees will receive.

• Depending on seniority and level, a lump-sum cash payment equal to a minimum of eight weeks and a maximum of 39 weeks of base pay.
• Employees who are at level 64 and below will be getting one week of base pay per six months of service.
• Employees at level 65 to 67 get two weeks of base pay per six months of service.
• Employees will get up to five years of insurance coverage. This covers medical, dental and vision care for employees and their dependents. Microsoft will only fully cover this in the first year. VRP participants will pay the monthly premium after that.
• Employees will continue regular stock vesting for six to 12 months. This will depend on the years of service of the employee.
• Continued retirement stock vesting but will depend on whether they meet certain requirements.

It was also stated in the document that employees who avail of the VRP will have their last day on 1 July. The Microsoft employment termination date will be on 2 July.

Further, Microsoft employees who have served less than 24 years will be getting six months of unvested stocks once their employment ends. As for those who have served more than 24 years, the vesting period will expand to 12 months.

Rare Offer May Not Happen Again

It was also noted in the document that there is no assurance that Microsoft will offer a similar program in the future. This is the first voluntary retirement program that the company has offered in its 51-year history.

During their earnings call last week, Microsoft said it will take a $900 million (£663 million) charge for the current quarter to cover its one-time voluntary retirement programme. This sum is roughly equal to a day of revenue as pointed out by GeekWire.

VRP Eligibility Exclusions, Limitations

Not all employees may qualify for this rare offer. Those who don't are advised to stay on. The company also warned employees to be prepared for potential team changes, especially if a coworker is eligible for the VRP.

Another key point from the released document is that the VRP is limited to US employees, as it has a greater impact for those based in the United States. The package was also designed to address US-specific realities, especially healthcare.

Those at the senior director level or above are excluded from the buyout. Employees with sales incentive plans are also ineligible.

Microsoft's Voluntary Retirement Program comes a year after the company laid off more than 15,000 workers in 2025. It also comes months after several executives either retired or stepped down, a sign that the company is headed in a different direction. AI integration is seen to be one of them as Microsoft hopes to keep itself afloat.