Microsoft and Skydance have offered a significant share of their employees the option to leave voluntarily in exchange for severance payments. They made the announcement on 26 October, the Wall Street Journal reports.
At Microsoft, the offer was made to 60,000 people, a quarter of the company’s total workforce. It is the largest voluntary redundancy offer in the company’s history.
Skydance, the parent company formed through the merger of Paramount Skydance and Warner Bros., did not disclose how many employees will be eligible. It released the offer at the same time as introducing a new requirement to work in the office five days a week.
Voluntary redundancy offers are a method increasingly used in recent years by large companies such as Google, Verizon and Intel. Seeking volunteers allows them to avoid the shock of sudden mass layoffs, particularly amid discontent over the impact of artificial intelligence.
Severance payments for voluntary departures can also soften the blow to staff morale by giving employees some choice in the decision to leave. However, companies take a risk, as voluntary redundancy often attracts in-demand specialists who find it easier to secure work elsewhere.
Both Microsoft and Skydance sought to target the offer selectively rather than extend it to all employees. Microsoft said it is excluding some divisions from the voluntary redundancy programme and that participation will depend on the company’s business priorities and staffing needs.
In a memo to employees, Microsoft’s chief people officer, Amy Coleman, noted that such voluntary redundancy payments are new for the company. “We will learn from this,” she wrote.
In April, Microsoft announced a voluntary early-retirement programme under which severance payments were offered to about 8,600 employees, and more than 30% accepted the offer, according to a person familiar with the matter. The company expects a much smaller percentage to take up the new offer.
Skydance executives told staff they would offer different terms to different employees: those covered by the programme will receive “personalised information and terms, as well as a period to decide whether to accept this one-time offer”.
Voluntary redundancy often appeals to employees who are a few years away from retirement, said Andy Challenger, chief revenue officer at outplacement firm Challenger, Gray & Christmas.