Microsoft (MSFT) has had a rough stretch in recent months, trading around 20% below all-time highs. Investors have turned cautious on the software giant, given its rising capital expenditures amid a difficult macro environment.
While much of the investor anxiety centers on AI costs and competition, Microsoft is also restructuring from the inside out. According to a memo viewed by The Wall Street Journal, Chief People Officer Amy Coleman told employees the company is rolling out a voluntary retirement program for a small percentage of long-serving U.S. workers.
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It is the first time Microsoft has offered such a program.
About 7% of its roughly 125,000 U.S. employees are eligible.
To qualify, workers must be at or below the senior director level, and their combined age and years of service must total at least 70.
Coleman wrote in her memo that the company needs to “simplify to move faster and deliver the solutions our customers count on,” according to the WSJ.
Microsoft is also changing how it awards stock, decoupling it from bonus structures. This comes alongside a string of leadership reshuffles, states the Journal.
Chief Executive Satya Nadella promoted Judson Althoff to lead commercial operations last October.
In March, he created a unified Copilot team under Jacob Andreou.
Mustafa Suleiman, the high-profile AI chief hired in 2024, saw his role narrow to focus on proprietary models.
Two longtime executives, Rajesh Jha and gaming chief Phil Spencer, both announced their exits this year.
Microsoft Remains Bullish on AI Moat
At the Morgan Stanley Technology, Media and Telecom Conference in March, Nadella argued that the company is not losing the AI race.
He described how artificial intelligence is driving a surge in what he called “artifact creation,” with Microsoft’s SharePoint and OneDrive seeing a dramatic uptick in documents and files generated through AI tools.
He also pointed to GitHub, where AI-generated public repositories now account for roughly 4% to 5% of total activity.
Nadella acknowledged that data center buildouts, silicon, storage, and compute costs are all rising together. But he argued that Microsoft’s software capabilities, diverse customer base, and ability to optimize across hardware generations give it a durable edge on return on invested capital.
