Apr 25, 2026
Silicon Valley has a job-security problem. The tech sector has ramped-up voluntary layoffs since Google's Platforms & Devices buyout in January 2025. For the first time, Microsoft appears poised to board the train of tech companies offering buyout packages to employees.
The company is offering about 8,750 people — 7% of its workforce — a buyout package. Those eligible can accept the package and leave the company, says CNBC coverage (1). What's in the offer won't be public until May 7.
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The buyout seems to target older employees below a certain level in the org chart. To take the offer, the Microsoft employee must be at or below senior director level, and must have 70 years of combined age and tenure.
The rule suggests Microsoft is cutting the highest-earners considered replaceable. It's a cost-cutting tactic that's made possible by voluntary layoffs, which allow companies to sidestep age-discrimination accusations while disproportionately targeting senior workforce members.
But these layoffs may be more than generic cost-cutting. The buyout comes at a time when AI is eating the average employee's lunch.
Layoffs target the workers AI is replacing
The question floating around Silicon Valley remains: "Do we really need the middle anymore?"
Microsoft's so-called Rule of 70 targets middle management. Specifically, those in their 50s to 60s with a decade or two of experience under their belts. TheNextWeb suggests these are the roles most susceptible to AI automation — at least, that's the theory. (2)
Newsweek tracks layoffs across big tech companies (3). Among them is Amazon, which announced a combined 30,000 layoffs in October 2025 and January this year. In an internal memo, senior VP Beth Galetti said the goal was to be "organized more leanly, with fewer layers and more ownership." She nodded to AI allowing companies like Amazon to do more with less (4).
In short: AI was coming for middle management.
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Last month, Block announced it would lay off 50% of its workforce. In a blog post co-authored by Block founder Jack Dorsey, the company said it was restructuring around AI (5).
"There is no need for a permanent middle-management layer," Dorsey wrote. "Everything else the old hierarchy did, the system coordinates."
The layoffs continue. This week, the New York Times reported Meta announced it would layoff 10% of its workforce, roughly 8,000 employees. These layoffs are involuntary. (6)
Microsoft, however, is taking a slightly different route. Employees eligible for the package will have the option to stay on at the company.
In a company memo, Microsoft's chief people officer said, according to Data Economy: "Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support." (7)
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In other words: Employees can choose whether to stay or leave. In theory, it's a noble concession that puts employees first. However, the reality of "voluntary layoffs" isn't so cut and dry.
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"Voluntary" doesn’t always mean what it seems
Voluntary layoffs are often followed by involuntary ones.
In 2025, Duke University extended buyout packages to employees. Over half of those eligible accepted the package (8). Nevertheless, the university followed the buyout with involuntary layoffs (9).
Google did something similar the same year. Host Merchant Services reports that Google offered to buyout employees in its Platforms & Devices decision; when too few accepted the package, Google turned to involuntary layoffs. (10)
Sometimes, the threat is explicit. In 2022, the Washington Post told employees in an internal memo that if more employees didn't accept the company’s voluntary layoff package, there would be another round of layoffs — and, the next time, it would be involuntary with "less generous" benefits. (11)
This means employees are put in a tricky position. Do they accept buyout offers or stick around and hope they aren't laid off in another round — one in which compensation isn't so generous?
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Workers shouldn't consider their jobs safe just because the company used the word "voluntary." Companies are mixing voluntary with involuntary layoffs. The packages offered by Microsoft follow layoffs of 6,000 people — 3% of the company's workforce — last year, says CNBC. (12)
Lindsay Greene, a partner at DSK Law, has suggested that workers who are offered these packages take their time.
"I think there's always something to have a discussion about or at least clarify," Greene says on CNBC Make It (13). She believes that companies should give you space to think — especially since contracts signed under pressure might be considered illegitimate under the law.
It may also be worth digging into how your company or competitors have handled voluntary layoffs in the past. Doing so might give you a better idea of what could potentially happen next.
History suggests what comes next for Microsoft employees may be a brief respite from layoffs or, less pleasant, another round of layoffs targeting the middle. If the latter is indeed the case, employees will be unlikely to have a say in whether or not they stay at the tech company.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1),(12),(13); The Next Web (2); Newsweek (3); About Amazon (4); Block (5); The New York Times (6); Dataconomy (7); The Duke Chronicle (8); The News & Observer (9); Host Merchant Services (10); Washingtonian (11)
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Cole Tretheway has been covering money for four years. He started as an intern at The Motley Fool Money, covering best-of credit cards, savings accounts and financial products. He's since expanded into holistic personal finance, including the psychology of money.
