Microsoft plans first voluntary employee buyout, CNBC reports

April 23 : Microsoft is planning its first voluntary employee buyout in the Windows maker’s 51-year history, CNBC reported on Thursday, citing a memo.

Like other U.S. tech giants, Microsoft has been spending aggressively on artificial intelligence. But adoption of one of its flagship AI services, the 365 Copilot, has reached just slightly over 3 per cent of its total 450 million 365 customers.

The one-time retirement program will be open to U.S. workers at the senior director level and below, whose years of employment and age add up to 70 years or more, CNBC reported. 

“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” Amy Coleman, Microsoft’s executive vice president and chief people officer, wrote in the memo viewed by CNBC. 

The company is changing how it distributes stock to employees for annual rewards and managers will no longer be required to tie stock directly to cash bonuses, CNBC said. Microsoft is also simplifying the manager review process, reducing pay options from nine to five.

Microsoft did not immediately respond to a Reuters request for comment.

Slowing cloud unit growth and investor concern over its heavy reliance on OpenAI have made Microsoft one of the worst-performing Big Tech stocks this year, with its shares tumbling nearly 24 per cent from January to March – the biggest quarterly drop since 2008.

The company in March unified the commercial and consumer versions of Copilot in a restructuring that now has Mustafa Suleyman, an industry veteran and Microsoft’s AI chief, focusing solely on building new AI models – an area where analysts say the software giant has lagged its rivals. 

The move is part of a series of wider changes at the company, including CEO Satya Nadella in October handing oversight of some marketing and operations to Judson Althoff, CEO of Microsoft’s commercial business, to sharpen his focus on the AI efforts.