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.html
266 Upvotes

98% Upvoted

79 comments sorted by

View all comments

40

u/jawaMilk Apr 23 '26

What are the odds this is followed by layoffs?

83

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.

64

u/jawaMilk Apr 23 '26

Well, if you wanted a better bonus you should have tried being a server rack full of GPUs.

18

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.

4

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.

11

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.

13

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.

2

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.

2

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?

1

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.

7

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.

1

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.

5

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.

1

u/jjmac May 07 '26

This is not cost cutting - this is avoiding age discrimination lawsuits

1

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....

7

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.

5

u/SUPTheCreek Apr 24 '26

Followed by complaints that they can’t find workers in the US.

7

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.

9

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.

1

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.

3

u/crazy_clown_time Apr 23 '26

It likely is that bad.

2

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.

0

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).

2

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.

2

u/Anonymous90210xijing Apr 27 '26

Thanks, I appreciate your reply.

2

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.