Microsoft's Voluntary Buyout on an H-1B: The December 31 Exit, the Grace Period and Your Green Card

Microsoft's offer is a voluntary exit, not a layoff. On H-1B or STEM OPT, the December 31 exit date starts clocks that matter more than the payout.

By F1Jobs Team · 2026-11-01 · 12 min read

A wooded corporate campus walkway at overcast midday, wet pavement curving between glass office buildings under a pale grey sky, with no people in view

Part of our guide to the H-1B 60-day grace period.

If you are on an H-1B, taking the Microsoft buyout ends the job your status rests on when you exit on December 31, 2026. As of November 1, 2026 you would then generally have up to 60 days, or less if your approval ends sooner, for a new employer to file, to change status or to leave. A pending Microsoft PERM will not follow you, but an approved I-140 can still support extensions. It is a voluntary offer, not a layoff, so that risk is yours to take or decline.

Status as of November 1, 2026:

Microsoft's Voluntary Exit Offer: made 2026-10-26; decide by early December; leavers exit 2026-12-31. Microsoft has not said publicly whether visa holders qualify.
The worker 60-day grace period: in effect under 8 CFR 214.1(l)(2).
Eliminating that grace period: proposed only (RIN 1615-AD22). Comments close 2026-11-10, 11:59 p.m. ET (check the Federal Register docket for the outcome after 2026-11-10).
DOL's PERM suspension of Microsoft and seven other employers: in effect since its 2026-10-08 announcement, with no published notice and no stated end date. It is not an H-1B suspension.
OPT unemployment limits (90 days, 150 with STEM OPT): in effect, unchanged.

Microsoft buyout on H-1B: the short answer

Accepting Microsoft's Voluntary Exit Offer ends the employment your H-1B rests on. As of 2026-11-01, the regulation gives up to 60 consecutive days, or until your validity period ends if sooner, to get a new petition filed, change status or depart. A pending Microsoft PERM will not become a new employer's case, but an approved I-140 can still support H-1B extensions.

Is Microsoft laying off 60,000 employees?

No. Microsoft made voluntary exit offers on 2026-10-26 to about 60,000 employees, roughly 27% of its workforce, according to CNBC. The offer reaches people at level 70 and below on participating teams in the US, Canada, India and the UK. Eligible employees decide by early December, and those who accept leave on 2026-12-31.

Microsoft expects most people offered it to stay: Fortune reported on 2026-10-30 that a company spokesperson anticipates uptake under 5%. Fortune also noted that Microsoft has not published a list of participating teams, so whether you were offered it at all depends first on your team.

Common misconception: "Microsoft is cutting 60,000 jobs, and the government has barred it from H-1B."

Correction (as of 2026-11-01): It is a buyout offer you can decline, not a layoff. Separately, DOL's 2026-10-08 action suspended Microsoft's PERM green-card filings, not its H-1B petitions. Mayer Brown's analysis of that action says it "does not suspend any employer from the H-1B program." According to press reports, Microsoft has said that 80% of its roughly 6,000 H-1B filings were extensions or changes of status.

What Microsoft has not said

Microsoft has not said publicly whether H-1B, H-4 EAD or STEM OPT employees are eligible, and the coverage we reviewed gives no payout terms. Your offer letter and Microsoft's immigration team are the sources that bind, so ask them in writing.

Do you get a grace period if you take a voluntary buyout on H-1B?

As of 2026-11-01, the worker grace period still applies. It is shorter than 60 days if your approval ends sooner, it is available once per validity period, and you cannot work during it.

The text of 8 CFR 214.1(l)(2) says you are not treated as out of status "solely on the basis of a cessation of the employment on which the alien's classification was based," for "up to 60 consecutive days or until the end of the authorized validity period, whichever is shorter." It applies "once during each authorized validity period," and "the alien may not work during such a period." It also says "DHS may eliminate or shorten this 60-day period as a matter of discretion," so treat it as discretionary, not guaranteed.

Does a voluntary exit count the same as a layoff? A buyout is a voluntary separation, closer to a resignation than a layoff. The regulation turns on "cessation of the employment," and its text does not say why the employment must end (our reading). Our guide to whether you get a grace period if you quit your H-1B job walks through how resignations are treated. Because your separation agreement and approval history decide the details, have an immigration attorney confirm your own dates before you sign.

Which date starts the clock? Ask Microsoft whether 2026-12-31 is both your last day of work and your separation date, or whether your duties end earlier. Our explainer on severance and when the H-1B grace period clock starts covers why the last working day and the last paycheck can differ.

What the proposal would change. The DHS proposal published 2026-09-11 would remove 214.1(l)(2) for H-1B, H-1B1, L-1, O-1, E-1, E-2, E-3, TN and their dependents, leaving only the 10-day window after a petition's validity period ends, which runs from your approval's end date, not from your exit. No final rule or effective date exists. Our breakdown of the DHS proposal to eliminate the 60-day grace period tracks it.

The dates for a December 31 exit, worked out

Calendar for an H-1B holder who accepts, assuming the approval runs well past March 2027 (as of 2026-11):

Date	What happens	Status as of 2026-11-01
2026-11-10 (Tue)	Comments close on the grace-period proposal, 11:59 p.m. ET	Proposed; check the docket after this date
Early December 2026	Your decision deadline (exact date in your offer)	Set by Microsoft
2026-12-11 (Fri)	Federal funding runs out unless Congress passes funding by then	Current funding in effect to 12-11
2026-12-31 (Thu)	Exit date for people who accept	Set by Microsoft
2027-01-01 (Fri)	Day 1 of a grace period, counting the day after your last day	Our arithmetic
2027-03-01 (Mon)	Day 60, the last day of a full window; a new petition or change of status must be filed, or you depart, by then	Our arithmetic; earlier if your approval ends first

The December 11 line matters because every new H-1B petition needs a certified Labor Condition Application (LCA) from DOL. The current stopgap funding law funds DOL through 2026-12-11. Going by past shutdowns, a lapse could pause DOL's Office of Foreign Labor Certification, which certifies LCAs. That is a reported risk based on precedent, not a prediction, and a reason not to plan a filing for the last week of your window.

What happens to your PERM or I-140 if you leave Microsoft?

A PERM labor certification is Microsoft's certification for a Microsoft job, so it does not become a new employer's green-card case. What leaving changes is how you extend H-1B beyond six years, where an old PERM or I-140 can still count under the AC21 rules.

Microsoft is one of eight employers whose PERM cases DOL suspended on 2026-10-08, with no stated basis or end date as of 2026-11-01. Our explainer on what DOL's PERM suspension of Microsoft, TCS and Infosys does covers the suspension itself. For the buyout decision, these are the rules in 8 CFR 214.2(h)(13)(iii)(D) and (E) that matter:

One-year extensions (AC21 s.106(a)) need a PERM or I-140 filed at least 365 days earlier. Under (D)(2) they run in 1-year increments until an approved labor certification expires, a final denial or revocation, or a decision to "Administratively or otherwise close" the case. A suspension is none of those, so practitioners read a suspended PERM as still counting (practitioner analysis, not agency guidance).
The new employer need not be the filer. Paragraph (D)(6) says the H-1B petitioner "need not be the employer that filed the application for labor certification or immigrant visa petition." Paragraph (E)(4) says the same for three-year extensions.
Three-year extensions (AC21 s.104(c)) need an approved I-140 and a visa that is unavailable to you because of the per-country limit, which is the typical India and China situation. Under (E)(3), you need not be in H-1B status when the new petition is filed, "including an alien who is not in the United States."
No stacking. Paragraph (D)(8) bars adding the days from two different PERM or I-140 filings together to reach 365.
A withdrawn I-140. Under 8 CFR 205.1(a)(3)(iii)(C), an I-140 that Microsoft withdraws 180 days or more after approval "remains approved unless its approval is revoked on other grounds." Withdrawn sooner, it is revoked, unless a related I-485 has been pending for 180 days or more. Our guide to the PERM suspension and H-1B extensions with an approved I-140 goes deeper.

Where you stand changes what a December 31 exit puts at risk (as of 2026-11):

Your green-card stage at Microsoft	What leaving does	Ask your attorney
No PERM filed yet	Nothing pending to lose; a new employer would start its own PERM	How many H-1B years you have left
PERM filed less than 365 days ago	It can count only once it is 365 days old and only if it has not been denied or closed by then; its days cannot be added to a new employer's PERM	Whether you will reach year six before any PERM of yours turns 365 days old
PERM filed 365+ days ago, suspended, not denied	May still support one-year extensions with a new employer	Whether Microsoft will withdraw it after you leave, and whether that counts as closing it (our reading: the main risk)
I-140 approved 180+ days ago	Stays approved even if withdrawn (unless revoked on other grounds); still supports three-year extensions if the per-country limit applies to you	Whether your priority date carries to a new employer's petition
I-140 approved less than 180 days ago	A withdrawal now would revoke it, unless a related I-485 has been pending 180+ days	Whether Microsoft will withdraw it, and when

If you are in year five or six of H-1B, this table may matter more than anything else in this guide.

Can you transfer your H-1B after taking a buyout?

Generally, yes, if a new employer files a new H-1B petition while you are still in status, which includes the grace period. Under the portability rule you can usually start work once it is filed.

8 CFR 214.2(h)(2)(i)(H) authorizes new employment "upon the filing" of a nonfrivolous H-1B petition, "or as of the requested start date, whichever is later," as long as it is filed before your authorized stay expires. For someone already counted against the cap, a new employer's petition is usually not a new lottery entry. Our H-1B transfer playbook covers timing, documents and what to ask a new employer.

Three things are specific to late 2026:

The $100,000 payment is blocked. USCIS's Form I-129 page says a court "vacated agency guidance implementing the $100,000 payment requirement," and adds: "If this order is later lifted, DHS still plans to collect the payment." USCIS's H-1B page (dated 2026-09-21) said change-of-status, amendment and extension requests it grants inside the US were never covered. A consular-notification petition, the usual route if you leave the US first, or a change of status USCIS denies, would be covered if collection resumed.
A new form edition. From 2026-11-09, USCIS accepts only the 09/09/26 edition of Form I-129, per the same I-129 page, so any petition a new employer files for you in January or February 2027 must use it.
Your family's status follows yours. An H-4 spouse's status, and any H-4 EAD, depends on your H-1B. If your spouse holds their own H-1B, changing to H-4 is one option people weigh during a grace period.

What if you're on STEM OPT at Microsoft?

On STEM OPT the clock that matters is unemployment, not an H-1B grace period. You get 150 days of unemployment in total across your whole OPT period, and days you used before Microsoft count against it.

The SEVIS Help Hub counts the limit from your actual OPT start date, for each day "without employer information" in SEVIS. If you had used 40 days on post-completion OPT, a December 31 exit would leave you at most 110 more (our arithmetic). Our guide to how STEM OPT unemployment days are counted shows how to track it.

USCIS's STEM OPT page says the employer must "Report the STEM OPT student's termination of employment or departure to the DSO within 5 business days." You must report a change of employer name or address to your DSO within 10 days. Any new STEM OPT employer must be enrolled in E-Verify. Your DSO will tell you what training-plan paperwork (Form I-983) the change needs and by when.

If you are in cap-gap. If Microsoft filed a cap-subject H-1B change of status for you that is still pending, your F-1 status and work authorization may rest on a cap-gap extension. USCIS's cap-gap page says the extension ends automatically if the petition is denied, withdrawn, revoked or rejected. Ask your DSO and an attorney what happens to that petition if you leave. If your change of status already took effect, you are on H-1B now and the sections above apply.

Do not confuse this with the F-1 60-day grace period, which runs after your OPT authorization ends and is intact because a federal court has blocked the Duration of Status rule since 2026-09-14 (DHS's appeal is pending). Take STEM OPT questions to your DSO, not Microsoft HR, which does not manage your SEVIS record.

Money and coverage questions that change the math

Health coverage in 2027. From tax years after 2026-12-31, the Marketplace premium tax credit is scheduled (by statute) to be zero for lawfully present people who are not "eligible aliens," which state summaries say includes H-1B, H-4 and F-1/OPT holders. The IRS's proposed regulations take comments until 2026-11-30.
Your 401(k) if you leave the US. Before age 59 1/2 an early withdrawal generally carries a 10% additional tax unless an exception applies, and rollovers avoid it, per IRS Topic 558. Nonresident aliens generally face 30% (or treaty-rate) withholding on distributions. A tax professional who handles nonresident and dual-status returns can tell you how the payout itself is taxed.

Should you take a buyout on H-1B? Settle these first

Nobody outside your situation can make this call, but these steps turn it into a decision instead of a guess:

Pull your latest Form I-797 approval notice and your I-94 from CBP's I-94 website, and note the earlier end date. That date, not 60 days, may be your real limit.
Ask Microsoft's immigration team, in writing, whether visa holders are eligible, whether 2026-12-31 is both your last working day and your separation date, and what it will do with your PERM or I-140.
Book an immigration attorney who represents you, not only the company, to map your H-1B years and AC21 position against the table above.
Line up a new employer that will file Form I-129 with a certified LCA (Form ETA-9035) well before your window ends, and ask whether it sponsors green cards.
Email your DSO if you are on STEM OPT, and confirm your remaining unemployment days before you accept.
Check the Federal Register docket for RIN 1615-AD22 after 2026-11-10. If your plan only works with a 60-day grace period, that is your biggest risk.
Decide by the deadline printed in your offer letter, not the "early December" in press reports.

Common mistakes

Calling it a layoff. A buyout is a choice. Declining the offer does not, by itself, change your H-1B.
Assuming you get a full 60 days. The grace period stops at your approval's end date if that comes first, and it is available once per validity period.
Working during the grace period. The regulation says you may not work in that window unless otherwise authorized.
Treating the PERM suspension as an H-1B ban. It covers PERM only. Microsoft and any new employer can still file H-1B petitions.
Ignoring the I-140 approval date. Whether an approved I-140 survives a withdrawal turns on the 180-day mark.
Filing in the last week. A funding lapse, a missing LCA or a late document can eat the final days of your window.

Frequently asked questions

Is Microsoft laying off 60,000 employees?

No. On 2026-10-26 Microsoft made voluntary exit offers to about 60,000 eligible employees, roughly 27% of its workforce, at level 70 and below on participating teams in the US, Canada, India and the UK. People who accept leave on 2026-12-31, and Fortune reported on 2026-10-30 that Microsoft expects fewer than 5% to take it. You can decline the offer, which is the key difference from a layoff.

Do I get a grace period if I accept a voluntary buyout on H-1B?

As of 2026-11-01 the worker grace period in 8 CFR 214.1(l)(2) still applies, for up to 60 consecutive days or until your authorized validity period ends, whichever is shorter, once per validity period, and you cannot work during it. DHS has proposed eliminating it (comments close 2026-11-10), but that proposal is not final. Ask an immigration attorney to confirm how a voluntary exit and your own dates are treated before you sign.

What happens to my PERM or I-140 if I leave Microsoft?

A PERM is Microsoft's certification for a Microsoft job, so it does not become a new employer's green-card case, and DOL has suspended Microsoft's PERM filings since announcing it on 2026-10-08, with no stated end date. Under AC21 rules, a PERM or I-140 filed 365 or more days earlier can still support one-year H-1B extensions with a new employer until it is denied, revoked or closed, and an approved I-140 still supports three-year extensions. An I-140 withdrawn 180 days or more after approval stays approved unless revoked on other grounds. An immigration attorney has to apply this to your dates.

Can I transfer my H-1B after taking a buyout?

Generally yes, if a new employer files a new H-1B petition while you are still in status, which includes the grace period. Under 8 CFR 214.2(h)(2)(i)(H) you can usually start work when a nonfrivolous petition is filed or on its requested start date, whichever is later. With a 2026-12-31 exit, a full 60-day window would end on 2027-03-01 by our count, or sooner if your approval ends first.

What if I'm on STEM OPT at Microsoft?

STEM OPT allows 150 days of unemployment in aggregate across your whole OPT period, counted for each day SEVIS shows you without employer information, so any days you already used reduce what is left. Microsoft must report your departure to your DSO within 5 business days, and any new STEM OPT employer must be enrolled in E-Verify. Talk to your DSO before you accept, and note that Microsoft has not said publicly whether visa holders qualify.

Sources

CNBC, Microsoft offers voluntary buyouts to 60,000 employees (2026-10-26)
Fortune, Microsoft's 60,000-person buyout offer (2026-10-30)
8 CFR 214.1, including (l)(2), the worker grace period
8 CFR 214.2, H-1B portability and AC21 extensions
8 CFR 205.1, including (a)(3)(iii)(C), I-140 withdrawals
Federal Register, Eliminating the Discretionary 60-Day Grace Period (proposed, 2026-09-11)
Mayer Brown, DOL enforcement actions in the H-1B and PERM probe (2026-10-15)
USCIS, Form I-129 and H-1B Specialty Occupations
USCIS, STEM OPT extension and cap-gap extension of OPT and F-1 status
SEVIS Help Hub, Unemployment counter
Federal Register, Premium Tax Credit proposed regulations (2026-10-15)
IRS, Topic 558, additional tax on early distributions
GovInfo, H.R. 6500, the continuing appropriations law funding agencies to 2026-12-11

How we checked this: we read the regulation text in 8 CFR 214.1, 214.2 and 205.1, USCIS's I-129, H-1B, STEM OPT and cap-gap pages, the SEVIS Help Hub, the Federal Register dockets, and CNBC's and Fortune's reporting on the offer, on 2026-11-01.

This is general information, not legal or tax advice. Your own approval notice, I-94 and offer letter govern, and your attorney (for H-1B and green-card strategy), your DSO (for F-1, OPT and SEVIS) and a tax professional (for the payout) should review your facts.

If you decide to leave, or are weighing it, and want help finding employers that file H-1B transfers, F1Jobs runs focused job searches for international candidates.