Microsoft Is Offering Severance to 60,000 Workers. What Should You Know Before You Sign?

On Oct. 26, Microsoft announced a "Voluntary Exit Offer" for employees at level 70 and below on participating teams in the U.S., Canada, India, and the United Kingdom. Reports put the number of eligible workers at about 60,000, roughly a quarter of the company. A company spokesperson told Bloomberg the package is similar to a standard severance offer. (Read the full story on WorkersRights.News.)

If you work for Microsoft in California, or your employer is rolling out a buyout like this one, here are the questions to answer before you sign anything.

Questions and answers

Do I have to take the buyout?

No. A voluntary exit offer is exactly that: voluntary. If you don't accept, you keep your job for now. The catch is that companies often use buyouts to shrink before deciding whether layoffs are needed, and Microsoft hasn't said what happens if too few people accept. So the real question isn't "do I have to?" It's whether this package is better than what you'd likely get if your job is cut later.

How long do I have to decide?

Microsoft hasn't announced a deadline. Whatever it is, the law sets some floors. In California, an employer offering a separation agreement must tell you that you have the right to consult a lawyer and give you at least five business days to do it (Gov. Code § 12964.5(b)(4)).

If you're 40 or older and the agreement waives age discrimination claims, federal law adds more. Because this is an exit incentive program offered to a group, you get at least 45 days to consider the agreement and 7 days to revoke after you sign (29 U.S.C. § 626(f)). See our guide for workers over 40.

What information should a 40-plus worker get with the offer?

In a group program, the employer must give you written information about who's eligible, the time limits, and the job titles and ages of the people selected, compared with the ages of people in the same job group who weren't (29 U.S.C. § 626(f)). Read those lists closely. If the program tilts toward older workers, that's worth showing a lawyer before you sign away age claims.

What am I giving up if I sign?

Usually, your right to sue. Most severance agreements include a general release of claims against the company, often with a waiver of California Civil Code section 1542, which covers claims you don't even know about yet. That's the trade: money for a release.

What the company can't do is make you sign away wages you've already earned. Your final pay, including accrued vacation, isn't severance, and an employer can't require a release of wages already due as a condition of paying them (Lab. Code § 206.5). Our list of severance agreement red flags covers the other clauses to watch for.

Will taking the buyout affect my unemployment benefits?

It can, and this is the question most people don't ask until it's too late. In California, you're disqualified from unemployment benefits if you leave work voluntarily without good cause (Unemp. Ins. Code § 1256). The state's appeals board has applied that rule to buyouts: a worker who took a buyout while continued work was still available was treated as having quit, and benefits were denied, even though layoffs were in the air (California Unemployment Insurance Appeals Board Precedent Benefit Decision P-B-456).

That doesn't mean every buyout costs you benefits. The facts matter, including whether your job was actually ending. But plan as if the EDD may say no, and factor that into whether the package is worth it.

Can I negotiate a buyout?

Group programs are usually built on a formula, and many employers present them as take-it-or-leave-it. That doesn't always hold. If you have a reason the company should pay more, such as a recent complaint, protected leave, an injury, an accommodation request, or a sign that age played a role, your release may be worth more than the formula says. Our guide on how much severance to ask for explains how leverage, not a spreadsheet, sets that number.

What should I do right now?

Watch for the email with your offer details and keep a copy of everything. Don't sign on the first read. Write down your deadline, check whether you're 40 or older, and add up what you'd give up: salary, benefits, unvested stock, and possible unemployment benefits. Then decide whether the package pays you enough to walk away.

This article is general information about California and federal law as of its date, not legal advice for your situation. Laws change, and the right move depends on your facts.