Microsoft Offers Early Retirement to Employees, Here's the Severance Package
Microsoft has chosen not to conduct mass layoffs in its efforts to reduce headcount and increase AI investments. The company is offering an early retirement option to 7% of its employees based in the United States (US).
The early retirement programme is available to those whose age and years of service total 70 or more. This option can be taken by employees at the senior director level or below, quoted from CNN International, Thursday (30/4/2026).
There is no information yet on the severance offered by Microsoft for this programme. Those who qualify will be informed by the company on 7 May 2026.
Microsoft’s standard severance typically consists of base salary for 12 weeks, plus an extra two weeks of pay for each year of service.
During the layoff storm in 2023, Microsoft CEO Satya Nadella also released employee shares early and provided six months of health insurance benefits.
The severance offered by Microsoft is quite high compared to the standards of other tech giants. Meta provided 16 weeks of base pay in 2022, while Google offered 14 weeks of base pay.
This early retirement is offered after 9,000 Microsoft workers were dismissed in the middle of last year. Regarding the layoffs at that time, CEO Satya Nadella explained the company’s three business priorities: security, quality, and AI transformation.
“Platform shifts are not only reshaping the products we build and the business models we pursue, but how we are organised and work together every day. It may feel disorienting for a time, but transformation is always like this,” Nadella explained.
Many companies are opting for large-scale layoffs due to the broader development of AI. Meta, for example, plans to cut 10% of its workforce or 8,000 jobs.
Meanwhile, 30,000 Amazon jobs have been eliminated in two rounds of layoffs in January and October last year. The fintech company Block also dismissed 40% of its workforce earlier this year.
In addition to layoffs, companies are also striving to win the AI race through massive spending. Microsoft has spent US$37.5 billion on data centres and infrastructure in the quarter ending December last year.
AI is claimed by several tech leaders to achieve more with smaller teams. This is largely due to AI’s capabilities in writing code, and Microsoft is also offering coding agents to developers.