Microsoft Redundancies: What the 60,000 Exit Offer Means for UK Employees

Microsoft has offered voluntary exit packages to about 60,000 of its 223,000 staff, and the UK is one of four countries in scope. If you work for Microsoft in the UK, you may be weighing up whether to take the offer and what you would be giving up.

In this guide, I explain what has been announced and how voluntary redundancy works under UK law. We also cover what to check before you sign anything.

What has Microsoft announced?

Microsoft announced a Voluntary Exit Offer on Monday 26 October 2026, in a staff memo from its chief people officer, Amy Coleman. Some press coverage describes it as a redundancy offer.

Here is what has been reported so far:

Microsoft ran a voluntary retirement programme earlier this year, open to US employees only. More than 30% of the roughly 8,750 eligible employees accepted it. That scheme included extra incentives such as extended healthcare, which the new offer reportedly does not. Microsoft is reportedly expecting fewer takers this time.

Coleman’s memo, as reported by CNBC, describes the offer as part of an effort to create greater flexibility, including “more ways for employees to shape their next chapter”. It lands while Microsoft spends heavily on AI infrastructure, with a capital expenditure forecast of $175 billion this year.

What do we not know about the UK terms yet?

The coverage so far does not set out UK specific terms. We have not seen the number of UK roles in scope or the UK severance formula. The application deadline has not been reported either.

Is a Microsoft voluntary exit the same as voluntary redundancy?

Often, yes, but it depends on how your exit is structured. Where an employer invites volunteers because it needs fewer people, the exit is normally treated as a redundancy dismissal. Some schemes are run as agreed terminations instead. Check your paperwork, because the label affects your statutory rights.

Volunteering is a choice. Saying no is not a resignation, and it does not take any of your rights away. The reports do not say what happens to employees who decline. Our guides to voluntary redundancy and compulsory redundancy explain how each process works.

What could UK employees be paid if they accept?

Your package will depend on your contract and Microsoft’s UK terms. These are the main elements to look for:

• Statutory redundancy pay. You need two years’ continuous service. For exits on or after 6 April 2026, weekly pay is capped at £751 and the maximum payment is £22,530, as set by the Employment Rights (Increase of Limits) Order 2026. Our statutory redundancy guide explains the formula.
• Notice pay. If you are paid instead of working your notice, it is taxed as normal pay. Our guide to payment in lieu of notice covers how this works.
• Holiday pay and any earned bonus.
• Share awards. For many tech employees, a large part of total pay can sit in stock. Ask in writing what happens to any unvested awards, because the reports do not say.
• The company’s own severance. The reports describe standard severance based on length of service. Compare it with the capped statutory figure to see how far it goes beyond the legal minimum.

How much of a Microsoft exit payment is taxed?

The first £30,000 of a genuine termination payment is tax-free. Payments that replace normal pay are taxed as normal pay.

Our guide on whether settlement agreements are taxable sets out the rules in full. You can also use our settlement agreement calculator to estimate your own package.

Does Microsoft have to consult UK staff first?

Possibly. An employer proposing 20 or more redundancies at one establishment within 90 days must consult collectively with employee representatives.

The redundancy consultation must begin at least 30 days before the first dismissal where 20 to 99 roles are affected. For 100 or more, the minimum is 45 days. Employees who volunteer are generally counted towards those numbers.

Whether the duty applies here depends on how many UK roles at a single site are in scope, and that has not been reported. Our collective redundancy guide explains how the process works.

What should you check before accepting a Microsoft exit offer?

In the UK, voluntary exits are normally documented in a settlement agreement. It will ask you to give up your right to bring any claims against your employer. To be valid, you must first take independent advice from a qualified solicitor.

Before you sign, check:

• How the exit is classed, and what that means for your statutory redundancy pay
• How your notice is handled, such as pay in lieu or garden leave
• What happens to unvested share awards and any bonus
• What happens to your pension and benefits after you leave
• Any restrictive covenants and confidentiality terms, particularly if you plan to join a competitor. Our guide on getting a job after a settlement agreement covers this
• The agreed wording of your reference
• The deadline. The Acas Code of Practice recommends at least 10 calendar days to review settlement terms and take advice. If the window is shorter, ask for more time

Taking the Microsoft exit offer? Get your settlement agreement checked

If you have decided to accept, our settlement agreement solicitors will review your terms so you can sign with confidence and move on to what comes next.

• We only act for employees, not employers
• Your employer usually covers our fees, so you pay nothing
• Most settlement agreements are completed within the hour
• Available today, wherever you are in England and Wales

Call us now on 020 7247 7190 or make a free enquiry online.

This article is based on press reports published on 26 and 27 October 2026. It is general information, not legal advice, and Microsoft’s UK terms may differ from what has been reported. Last updated 27 October 2026.