Microsoft is offering buyout packages to approximately 60,000 of its employees, which is more than 25% of its total workforce. This number is quite substantial by any standard, and it has sent a shockwave through the entire industry this week.

I am a former Vice President of Human Resources at Microsoft. Although I have been away from the company for some time and no longer have access to internal information, I spent 50 years at Microsoft and throughout the industry. Here are some key points that Microsoft employees should consider when thinking about a buyout option, as well as things they may not be aware of.

The buyout offer you make may not necessarily be the best one you can get.

In a buyout, factors such as position, length of service, level, and other considerations are taken into account, and each individual receives a customized plan. The offer typically includes salary, continuation of benefits, as well as possible acceleration or continuation of equity ownership.

That being said, the buyout offered by Microsoft may not necessarily be better than a layoff plan, but companies usually provide better terms to employees who resign voluntarily than to those who are laid off. This is not only to encourage employees to leave voluntarily, but also because it is less costly for the company. The legal risks are lower, as are the time and expenses involved. It is also easier for the company to manage in such cases.

If you receive a buyout offer, I usually consider it to be the best deal you can get. If not, you might end up accepting the same terms as those laid off, and in that case, you'll also miss out on the opportunity to receive unemployment benefits.

A buyout may force you to make some very difficult career choices.

If you receive a buyout offer, the next step should be to check the budget. Is this offer sufficient for you to retire? Is it enough to support you during a longer period of job hunting? A buyout can sometimes become a catalyst that forces people to make difficult career choices.

Take the time to examine your cash flow, with a particular focus on benefits. For many people, healthcare costs represent a significant portion of their budget. Comparing a buyout option with continuing to maintain health insurance coverage is often the key to making a decision.

You also need to consider any potential equity ownership dates you may have. Compare how your ownership timing would change with and without accepting the proposal, as these dates could significantly affect your investment situation. Whether you should accept the buyout depends largely on the proposal itself and your personal circumstances. If you are already close to retirement, this proposal might be the catalyst for you to move forward. Perhaps this is the best offer you will receive.

However, if you still need to continue working, there are more things to consider.

Accepting a buyout could give you an edge in the tough job market.

Over the past year or so, the job market in the tech industry has been tough, and there are signs that it may continue to deteriorate. If a buyout package is not enough to allow you to retire, you should prepare for a longer period of job hunting, possibly six months or even longer. The situation outside is not easy, so be prepared for it.

If you still need to continue working, one thing to consider is that accepting a buyout could put you ahead in the job market. Assuming Microsoft and other companies continue to lay off employees as they did last time, the tech job market will be flooded with a large number of talented individuals. Of course, you can also look for a new job while you already have one, but accepting a buyout will give you the time to focus solely on job hunting full-time.

Anyway, if you plan to look for a job in the future, don't procrastinate. There doesn't seem to be any sign of improvement in this market.

Finally, if you receive a buyout offer, don't ignore it. This is a signal. I would interpret it as the company's clear acknowledgment of your value from their perspective. You might bet that there won't be any further layoffs, but if they do happen, I would bet that those who refuse the buyout will be on the list.

Whether accepting a buyout or not, there are still some things that need to be done.

Update your resume. Take the time to polish it and highlight the most relevant set of skills. In a contracting market, having a specific skill that others are looking for is the safest option. During tough times, generalists are often the first to be let go.

Build and expand your network with others. Have coffee with everyone you know, or hold a video conference. Colleagues from other companies, or even people from different industries, are extremely valuable during difficult times. Especially in a world where changes are constant and it's hard to predict the next hot topic, having as many acquaintances across various industries as possible is a huge asset.

Rather than frequently applying for jobs, it's better to keep these connections active. You never know when someone's manager might say, "We need someone like that." And your friend might say, "I happen to know a person who fits the profile."

Whether you obtain a buyout package or decide to accept it or not, having a network of contacts that you can reach out to is your most important professional asset.

What to do if you receive a buyout offer

First, check the budget, and then contact others.

Carefully decide on your short-term and long-term financial future, and make decisions based on hard facts. Then, reach out to people you know in various industries and locations. These relationships can serve as a great reference for you and may also pave the way for your next job, or they could become the friends you need after retirement.

When contacting Microsoft regarding this report, a Microsoft spokesperson referred to a statement on their official Microsoft blog. Part of the statement read: "Today, we are introducing a new voluntary separation program ( VEO ) for eligible employees within the participating organizations." They added: " VEO is similar to the standard layoff program and varies depending on the market. The program includes payments based on the length of service and basic salary, as well as career transition services, which include career counseling and job search assistance."