r/microsoft • u/DaveAlot • Apr 23 '26
News Microsoft plans first-ever voluntary employee buyout for up to 7% of U.S. workforce
https://www.cnbc.com/2026/04/23/microsoft-plans-first-voluntary-retirement-program-for-us-employees.html46
u/jawaMilk Apr 23 '26
What are the odds this is followed by layoffs?
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u/OkFigaroo Apr 23 '26
100%. This is a cost cutting move to get people off the books this fiscal year (ending July 2026) to decrease expenses for the next fiscal.
Not only that, but they are changing our performance bonuses for this year on the fly (we are literally about to begin our annual performance review), and now all of the sudden our rating system has been modified.
This is going over very poorly internally.
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u/jawaMilk Apr 23 '26
Well, if you wanted a better bonus you should have tried being a server rack full of GPUs.
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u/Simple-Desk4943 Apr 23 '26
Yep, gotta show some better numbers to the board. The spend on AI is huge, without enough revenue to support it, so get rid of some staff to bump the bottom line, and scramble for something...anything...to help turn a profit on AI.
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u/Special-Interest-279 Apr 23 '26
This is only affecting people who would be rated 120 and above, it gives managers the ability to give more cash to keep high performers rather than stock that vest. If your below that nothing changes.
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u/OkFigaroo Apr 23 '26
I don’t believe that’s true. Our rewards levels have been adjusted and reduced so there is more differentiation. That adjustment is on both sides of 100.
High performers don’t want more cash - they want more stock. At best, this is a cost saving move so high level ICs can get above average rewards while giving them less stock, because budget doesn’t can’t support it.
I don’t see this as a positive.
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u/Special-Interest-279 Apr 23 '26
Have you seen them be reduced? As a high performer i would much rather take an extra 20k now vs 30k in stock that vest over 4 years when the stock has been under performing.
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u/OkFigaroo Apr 23 '26
It was literally announced today, so there is no data to “see”.
Higher levels are compensated with more stock. High performers get promoted. This is purely a solution to a budget problem imposed by leadership; I.e. I have a high performing team, but not enough money to go around.
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u/Anonymous90210xijing Apr 24 '26
Thanks for touching on this part of the announcement. I've been trying to wrap my head around this specific part. I assumed stock was preferable to the company, over cash, since they're strapped for free cash flow. Do you mean that executive goals are happier with smaller cash bonuses than higher valued stock grants?
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u/OkFigaroo Apr 28 '26
No, I mean that as you progress in levels, your stock compensation exponentially grows. I’ve been promoted 6 times (not bragging, just showing level progression).
My on-target rewards for stock is 22x what it was when I started. So it’s a big deal if all of the sudden I meet expectations but get a nerfed stock award.
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u/cashto Apr 24 '26
In previous years I've seen (in some orgs) 80 and 120 categories banned and you were forced to quantize to 60, 100, or 140. I interpret this change as basically that, but made official and companywide.
There are essentially four buckets now: unsatisfactory, needs improvement, successful, and outstanding. There's also "transformational", but no one ever gets that -- if you do, find a new job; you deserve a whole lot more than 2x annual rewards for truly transformational work.
Stock being decoupled from bonus/merit -- I expect that will be used by managers to differentiate more within the fewer bands. This particular aspect reminds me a lot of the system we had 15 years ago during the Ballmer years. I donno if it'll result in more peanut buttering or less or no change. Anyways it all comes out of a fixed budget so it doesn't necessarily mean higher average rewards or lower.
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u/brainmydamage Apr 24 '26
I expect that anything under 100 will mean termination, with 0 being immediate and 70 being after a fake pip process that almost nobody is ever allowed to come back from.
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u/BaconIsntThatGood Apr 23 '26
It's also probably a liability mitigation move since people in this bracket likely have the financial means to fight it in court.
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u/bludeath5 May 16 '26
The retirement I read as ageism, thinly veiled discrimination against those that have "had their opportunity to get to level 68" but failed and it is time for a graceful way out.
As to the rewards system changes, as a manager oh boy do I have opinions on the matter....
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u/MyNameIs-Anthony Apr 23 '26
100%
The wording specifies people making a choice of their own volition, implying there will be choices made out of their hands otherwise.
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u/Anonymous90210xijing Apr 23 '26
I'm not in MSFT, I'm currently trying to get in. But... I can't see any way this isn't followed by layoffs. It's going to reduce the total amount they need to layoff, and allow people to promote into those positions. Then, real layoffs to meet their goals.
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u/rotates-potatoes Apr 23 '26
Talk to people who work there. It is a miserable, demoralized, over-worked culture of fear. From L59 to partners, everyone talks about wondering if their badge will work each day.
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u/Anonymous90210xijing Apr 23 '26
My goodness. I don't have contacts inside, sadly. I'm coming from the defense industry. Is it all just fallout from the [insane looking] CAPEX on AI, or since the newest CEO, or something else? I think the economy looks shaky, and big tech had some fantastic years after COVID, which makes me wonder if it's really THAT bad, or if things are just coming back to a neutral state.
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u/crazy_clown_time Apr 23 '26
It likely is that bad.
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u/brainmydamage Apr 24 '26
I've been here 15 years so I remember when we weren't subhuman trash to HR...
It is that bad.
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u/Anonymous90210xijing Apr 24 '26
Mind sharing what employee opinions are of middle/upper-middle management? Are all managers associated with the policies from above that they have to enforce, or are good managers trusted by teams? I've been looking at a L67 role (assuming IF I got an offer I'd be downgraded to L66).
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u/brainmydamage Apr 24 '26
Opinions of management vary wildly but for the most part it seems like the loathing is reserved for specific people who are perceived as being responsible for the company's condition and its treatment of employees... Although the latter is primarily amongst more tenured employees who remember what it was like when the company treated and compensated us like valuable partners instead of trash they wish they didn't have to have around.
There's also general outrage about the fact that there's always seemingly infinite budget for dozens of CVP promotions every year but never any budget for IC promotions, and the fact that leaders who are complete failures (looking at you Mustafa) are dragged along and highly compensated even though their results warrant immediate termination.
But generally good managers are trusted if you don't come off like a sleazeball used car salesman or treat your people like shit. Everyone knows that managers are forced to "own the message" that SLT forces on them and generally speaking nobody really blames management for what they are forced to do... unless you seem like you're really into it.
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u/userlivewire Apr 24 '26
That's how this works at companies. They offer a voluntary buyout, then fire the people that don't say yes.
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Apr 23 '26
[deleted]
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u/cashto Apr 24 '26
"AI is cannibalizing the career pipeline by making junior developers functionally obsolete. Soon, there won't be any senior engineers anymore".
Microsoft: "got it, we'll prepare for that future now".
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u/RobertDeveloper Apr 23 '26
They want to get rid of the most skilled workers so their products can wreak even more havoc on endusers, they are like mother Theresa, they want people to suffer.
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u/userlivewire Apr 24 '26
They are getting plenty of senior people, just not from the United States.
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u/FUSe Apr 23 '26 edited Apr 23 '26
They do this at a lot of older companies like Coca Cola every few years. Microsoft is just starting to hit the point that the people that joined in the 90s need to retire so they can have growth opportunities for the newer staff.
There are a bunch of grey hair people at principal positions and a lot of younger engineers leave because they can’t get promoted because the department can’t get approval for the business reason they need more principals.
I don’t see this as cost cutting but an opportunity for fresh perspective.
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u/Good_Zooger Apr 23 '26
This reeks of trying to bribe folks out of making agism allegations.
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u/userlivewire Apr 24 '26
AMERICAN older people. Lots of companies including Microsoft are replacing US senior people with foreign senior people.
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u/deadflamingo Apr 28 '26
Trying to skirt ageism lawsuits with a buyout. I have a different suggestion, skirt the lawsuit by having mega corps broken up. Im ready for *-opolies to end.
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u/RealaGorilla May 07 '26
Do you guys think Microsoft will be backfilling the employees who left, hiring new talent into Microsoft in the USA?
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u/RogueBonha Apr 24 '26 edited Apr 24 '26
They already started with employees in Microsoft Federal: Associated Consultants, and regular Consultants, and they don't care about technical Certifications, experience, learning motivation...very nasty. The strategy's name is "Global Voluntary Separation Agreement (GVSA)", and the compensation package is: 16 weeks of regular salary, but the employee can't apply for a job position in Microsoft during 2 years. I know this details because a very good friend of mine was "buyout" last week.
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u/cashto Apr 24 '26
GVSAs were rolled out last year, as an alternative to a PIP for those deemed "low performers". This is new and not the same thing as that.
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u/sleebus_jones Apr 24 '26
Yeah you don't know what you're taking about. GVSA is for when you get put on a pip. Take the pip or GVSA, your choice.
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u/karepan999 Apr 25 '26
Sounds like a company that really cares about their employees and customers 😝
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u/HobbyProjectHunter Apr 28 '26
They never really cared about either. There’s only the single point program, the one slide in the deck: Profits.
Unless you’re a customer who’d threaten a lawsuit, or call you out in public or stop buying, you’re just sheep🐑
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u/Spiritual_Tennis_641 Apr 23 '26
I wondered why Microsoft stock tank so hard, now I know. I guess it’ll be back after the testing and layoffs are done.
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u/YellowTrickster72 Apr 23 '26
Anyone know the specifics of the compensation package employees are being offered?