Workers at Google, Microsoft Push for Broader Buyout Access

Voluntary buyouts are getting a second look in Big Tech, driven by worker pressure and a growing pool of longtime employees.

Nearly 100 Google workers rallied outside the company's Mountain View headquarters this month to demand that exit offers become the default first step whenever the company plans job cuts. The union presented a petition signed by more than 4,500 Googlers calling for improved layoff protections, including buyouts extended to all members of affected teams regardless of tenure.

Voluntary buyouts "provide agency to workers," said Emma Jackson, a Google employee of more than 20 years and a leader of the Alphabet Workers Union. She said workers nearing retirement might have accepted buyouts in earlier rounds of layoffs, reducing the number of cuts needed. Jackson called the approach "more humane."

Google did not respond to requests for comment from Business Insider. The company said in a Wednesday securities filing that its workforce grew by nearly 12,000 employees over the past year, reaching about 199,000 at the end of June.

Microsoft launched its first broad voluntary retirement program in April, offering packages to thousands of longtime US employees. The company said more than 30% of those eligible accepted. Microsoft then cut about 4,800 jobs earlier this month.

Those who accepted the retirement offer received a payout based on seniority and tenure, plus up to five years of health insurance coverage. The formula meant some employees became eligible well before a conventional retirement age, forcing them to weigh whether to leave careers they had not expected to end anytime soon.

At 47, retirement was not on Marisela Cerda's radar. Yet Cerda, a principal customer experience manager who joined Microsoft after college in 2001, was among those who received an exit offer. She ultimately decided to stay. "You move toward what you want more of, versus moving away from things you don't want," she said. A Microsoft spokesperson declined to comment further.

As Silicon Valley companies grow older alongside their workforces, buyouts may grow more attractive, said Josh Bersin, an HR analyst and consultant. Forcing veteran employees to leave through layoffs "creates a lot of bad blood," he said.

Peter Rahbar, a New York employment attorney, said buyouts might not reduce staff as quickly as layoffs, but they do not carry the same morale costs for those who remain or for potential future hires. "How you treat people on the way out is certainly something people look at on the way in," he said.

There are downsides for employers. Offering buyouts can make labor reductions less predictable, said Jay Zagorsky, a professor at Boston University's Questrom School of Business. If too few employees accept, a company may still need to make cuts to reach its target. "With a layoff, there's certainty," he said.

Extending buyout offers to everyone, including those with only a few years of service, also carries drawbacks. "People whom you would prefer to stay might leave," and could go to a competitor, said Laszlo Bock, a former Google head of human resources who now advises CEOs. The risk is especially concerning for companies with what he calls "spiky talent," where a small number of employees create disproportionate value. "That's characteristic of Silicon Valley companies," he said.

For workers who receive a buyout offer, Rahbar said they should understand how accepting it would affect retirement benefits, stock awards, deferred compensation, and healthcare coverage. Buyout packages also tend to be more generous than severance offers, he added, and there is an emotional difference between choosing to leave and being told to go. "People are feeling good about leaving on their own terms," he said. "With a layoff, they're clearly not."

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