Microsoft is trying to cull its workforce by dangling an offer that might be hard for some employees to refuse. This week, the tech giant announced voluntary buyouts for 60,000 people, which is more than a quarter of its workforce.
Leadership has framed this as a way for employees to have more agency over their future at the company. “The Voluntary Exit Offer reflects an important part of how we’re evolving our approach to change: creating greater flexibility and, where possible, more ways for employees to shape their next chapter,” chief people officer Amy Coleman wrote in a blog post. For employees who were already entertaining the idea of an outside opportunity, she said this could present “a new choice to make that transition now with support.”
It’s not the first time Microsoft has offered buyouts to trim its head count. Earlier this year, the company used another euphemism to nudge thousands of employees to leave. The “Voluntary Retirement Program” was intended for older, more senior employees who may have been planning to retire soon; according to The Wall Street Journal, Microsoft extended offers to about 8,600 employees and more than 30% accepted.
Voluntary buyouts have become an attractive option for companies looking to cut jobs and reduce costs without resorting to explicit layoffs, which draw headlines and heightened scrutiny. Mass layoffs can also significantly impact morale, something major employers like Microsoft are all too familiar with. Just this year, Microsoft faced its share of criticism for eliminating 3,200 jobs in its Xbox division, targeting some veteran staffers who had spent decades there; the company also made thousands of cuts across other departments.
There are all kinds of euphemistic terms for this strategy, which has become a more popular approach to workforce reductions in corporate America. Just this week, Skydance—the new company formed from the merger between Paramount and Warner Bros. Discovery—proposed buyouts to a number of employees (in addition to adopting a five-day return-to-office mandate that had already been implemented at Paramount). Companies like Google and Verizon have also deployed voluntary buyouts to soften the blow when they need to become leaner.
As the public backlash over AI intensifies, companies may want to avoid the negative attention they attract when they make sweeping changes to their workforce. But they also run the risk of losing top talent when they make buyout offers—and it isn’t always clear how many people will choose to leave. (According to The Wall Street Journal, Microsoft anticipates that a much smaller share of people eligible for buyouts will accept this time, compared with the 30% who took the offer earlier this year.)
For certain employees, a voluntary exit can, in fact, present an opportunity. But it’s not always clear when it makes sense to take a buyout.
As Fast Company has reported, companies sometimes target highly paid, experienced employees in the hopes of replacing them with cheaper labor. When presented with a buyout offer, experts say it’s important to think carefully about what it could mean for your career and where you see yourself next.
“The best-case scenario for a voluntary layoff is either stepping straight into retirement or having a new job already lined up,” writes Fast Company contributor Emily Guy Birken. “Then your severance package becomes an unexpected pot of gold in the path you were already walking. Unfortunately, most of us aren’t that lucky.”
If you weren’t planning to leave prior to the buyout offer, it can be helpful to assess your future career prospects. Since companies usually give employees some time to make a decision about a buyout, you could put out feelers to get a sense of what the job market is like. A generous severance offer may be alluring, but it also means you’ll have to find a new job.
If the severance offer is not compelling enough to consider, Birken points out that you’re in a position to try and negotiate a better package. “Learning that your employer is offering voluntary layoffs is stressful, but it doesn’t mean the company has all the cards,” she writes. “The organization wants something—a reduction in force—which means you have leverage.”
The most important consideration, however, may be whether you think you’ll eventually lose your job either way, since voluntary exit programs can also just be a sign that layoffs are on the horizon. Sometimes a buyout offer is primarily a way to manage optics and give employees a false sense of control—only for a company to turn around and fire them a few months down the road.
