Microsoft is back with another voluntary exit program. But this time, the rules are different.
Earlier this year, Microsoft introduced its first-ever Voluntary Retirement Program (VRP), primarily targeting long-tenured employees approaching retirement. Now, the company has announced a new Voluntary Exit Offer (VEO), potentially available to a large percentage of their workforce.
If you’ve received an eligibility email, you may be wondering: Is this a good opportunity? How does it compare to the earlier retirement program? And most importantly, does accepting the offer make financial sense for you?
Here’s what we know so far and what you should be thinking about.
The Deadline Is Closer Than You Think
Microsoft announced VEO on October 26, 2026. Eligible employees should receive an email with their individual offer details.
Here are the important dates:
- October 26, 2026: VEO announced and offers communicated to eligible employees.
- December 9, 2026, at 11:59 p.m. Pacific: Deadline to electronically sign the VEO Separation Agreement and Release through Microsoft’s Total Rewards Portal.
- 7-day revocation period: Employees have seven days after signing to revoke their acceptance if they change their minds.
- December 31, 2026: Fixed termination date for employees who accept VEO and meet the program requirements.
That gives eligible employees roughly 6 weeks to evaluate what could be one of their most consequential financial decisions.
VEO vs. VRP Package
Unlike the earlier VRP, the new VEO is not restricted to employees nearing retirement.
|
Eligibility |
Earlier VRP |
New VEO |
|
Employee level |
Level 67 and below |
Level 70 and below |
|
Age requirement |
Age + service ≥ 70 |
None |
|
Tenure requirement |
Part of age/service test |
None |
|
Geography |
United States |
U.S., Canada, U.K., India |
|
Eligible teams |
Based on VRP criteria |
Selected organizations only |
|
Performance requirement |
Not an eligibility factor |
Not an eligibility factor |
Importantly, not every Microsoft employee qualifies. Eligibility depends on whether your level, country, and other organization level factors.
What’s Actually in the Package
Cash Severance: 8 to 39 Weeks of Base Pay
Your severance is calculated based on your base salary, stock level and eligible years of service.
- Minimum severance: 8 weeks of base pay
- Maximum severance: 39 weeks of base pay
- Formula: 2 weeks of base pay for every 6 months of eligible service, subject to the program’s minimum and maximum
For example, an employee with a $200,000 base salary who qualifies for the maximum 39 weeks could receive approximately $150,000 in severance, before taxes and deductions.
Important to note that this calculation is based on base salary, not total compensation, which may include bonuses and RSUs.
Continuous Stock Vesting: Employees receiving VEO may qualify for 12 months of continued scheduled vesting of unvested stock awards following their December 31, 2026, termination date. If you qualify for Microsoft’s Stock Plan Retirement provisions (55/15), additional stock awards may continue vesting under the terms of your existing award agreements.
For example, employees meeting the applicable retirement vesting requirements may retain scheduled vesting of eligible stock awards granted more than one year before termination.
Healthcare: Up to 18 Months
Employees and eligible dependents may continue their current healthcare coverage for up to 18 months, subject to eligibility requirements.
- First 6 months: Coverage at no cost to the employee.
- Following 12 months: Continued coverage may be available, with employee-paid premiums depending on the applicable coverage arrangements.
This is a meaningful benefit, although it differs from the earlier VRP, which offered eligible employees up to five years of continued healthcare access.
If you’re considering early retirement, make sure you understand the cost of coverage after the initial six months and how you’ll bridge the gap to Medicare eligibility.
Career Transition Support: 4 Months
Employees accepting VEO will also be eligible for four months of professional career coaching and transition support.
If you’re planning to look for another job rather than retire, this could be a useful resource.
Rehire Restriction: 2 Years
One provision worth paying attention to: Employees accepting VEO agree that they will not be eligible to rehire at Microsoft for two years following their termination date.
If you’re considering VEO as an opportunity to take a short career break and potentially return to Microsoft, this restriction matters.
The separation agreement also includes a broad release of employment-related claims. Microsoft advises employees to consult an attorney before signing.
What Happens if You Decline the Offer?
According to Microsoft’s offer documents, declining VEO means your employment continues in your current position under your existing terms and conditions. Microsoft states that your employment will not change solely because you decline the offer.
Of course, that doesn’t eliminate the possibility of future organizational changes or layoffs.
Before You Make Your Decision
The VEO package may look attractive, especially when you add severance and continued RSU vesting. It is worth spending time understanding following questions:
How does leaving Microsoft affect your future stock compensation?
What happens to your deferred compensation?
How much of your severance will you keep after taxes?
And if you’re considering retirement, can your portfolio support that decision?
At Avier Wealth Advisors, we work closely with Microsoft professionals to evaluate complex compensation, tax and retirement decisions. If you’ve received a VEO offer and would like a second set of eyes on the numbers, we’re happy to be a sounding board.