Microsoft is planning to cut approximately 2.5% of its roughly 220,000-person global workforce this week, including sales, consulting and Xbox roles, Business Insider reported. The smaller size of this round, compared with the nearly 4% cut last July, is due in part to the voluntary retirement program the company launched earlier this year, which reduced the need for broader reductions, according to Business Insider‘s reporting.
Microsoft’s April 2026 Rule of 70 program was open to U.S. employees at senior director level and below whose age and years of service added up to 70 or more, HR Executive reported at the time. The retirement offer covered about 8,750 eligible U.S. employees, per CNBC, excluding sales incentive-plan staff.
Amy Coleman, Microsoft’s chief people officer, framed the program positively in the memo announcing it, which CNBC obtained. “Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” Coleman wrote.
Buyouts before layoffs
This sequence suggests that Microsoft used the buyouts to measure the acceptance rate, then calculate the remaining headcount gap and cut to close it. Age plus tenure, rather than age alone, can be a design choice for reaching tenured, higher-paid employees while possibly avoiding age discrimination exposure.
HR Executive reported in March on an age discrimination suit against Meta alleging that workers over 50 were 2.5 times more likely to lose their jobs than those under 40 during a 2025 layoff round, with the suit pointing to salary-based selection criteria as a driver. Age-plus-tenure formulas like Microsoft’s are, in part, a response that doesn’t use age as a direct criterion.
The uptake numbers suggest the choice wasn’t an easy one for many eligible employees. Roughly two-thirds of eligible employees appear to have turned the offer down, based on the acceptance rate Business Insider reported. The structure was capped at 39 weeks of pay, with up to five years of continued health coverage and employees with 24 or more years of service also received 12 months of accelerated stock vesting, according to reports.
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