Microsoft Offers Buyouts to 60,000 Employees Across Four Countries

Summary

• Microsoft is extending voluntary exit offers to employees in the U.S., U.K., Canada and India.
• Around 60,000 workers are eligible, a person familiar with the matter told The Wall Street Journal.
• The offer follows an April retirement program and thousands of job cuts this year.

The latest

Roughly 60,000 Microsoft employees are eligible for voluntary buyouts under a new exit program the company disclosed on Monday, according to a person familiar with the matter. The offer is open to select employees in the U.S., the U.K., Canada and India. Microsoft described the program as time-limited and said it would come with financial support and career planning resources.

Details

• The scale: About 60,000 employees across four countries are eligible, the person familiar with the matter said. Microsoft itself said only that the offers are going to thousands of employees in several countries, and did not publish a country-by-country breakdown of who qualifies or how many it expects to accept.
• The countries: Eligibility is limited to select employees in Canada, India, the United Kingdom and the United States, the company said. Microsoft did not say why those four markets were chosen, and did not indicate whether the program would later be extended to staff in other regions where it operates.
• The company's framing: Amy Coleman, Microsoft's chief people officer, told employees in a message that the offer is "an important part of how we're evolving our approach to change," describing it as creating greater flexibility and more ways for employees to shape what comes next.
• The terms: Microsoft said the program is time-limited and will provide eligible employees with financial support and career planning resources. The company did not disclose the severance formula, the acceptance deadline, or what happens to employees who decline the offer.
• The timing: Coleman said eligible employees would receive an email link with their individual offer details within hours of the announcement. Microsoft did not set out a public timeline for when it expects the program to close or when departures would take effect.
• The precedent: Microsoft announced a voluntary retirement program in April that offered buyouts to around 8,600 employees, the person said. More than 30% of those eligible accepted. The new program is roughly seven times larger by headcount.
• The wider shift: The April program was part of a broader move by Microsoft to change its performance system and how it awards bonuses and stock options, according to a memo to employees from Coleman reviewed by The Wall Street Journal at the time.
• The job cuts: Microsoft announced 3,200 job cuts in its Xbox videogames division earlier this year, separate from the voluntary programs. Those reductions were involuntary, unlike the exit offers now being extended across the four countries.
• The market: Microsoft shares were up 1.16% at the time of the report. The company did not tie the buyout program to a specific cost-savings target or earnings guidance.

Between the lines

The April program drew acceptances from more than 30% of those eligible. If a comparable share accepts this time across a pool of roughly 60,000, the headcount effect would be far larger than the 3,200 Xbox cuts announced earlier this year, without the company having to label it a layoff.

What's next

Watch the acceptance rate once the time-limited window closes, whether Microsoft discloses a cost figure tied to the program in its next earnings report, and whether eligibility is extended beyond the four named countries.

Source: The Wall Street Journal