The announcement was made in an email to employees.
Microsoft, the biggest software company in the world, is doing away with its four-week vacation policy and allowing US workers unlimited paid time off.
A "discretionary time off" approach that allows employees to take time off as needed will replace the tech giant's paid time off model.
Kathleen Hogan, Microsoft's chief people officer, informed her staff of the news in an email, according to a memo obtained by The Verge.
"Discretionary time off" is paid time off granted to a professional staff employee for a noteworthy achievement or effort that contributes to the organisation's mission, goals, or objectives.
"How, when, and where we do our jobs has changed dramatically.""And as we've transformed, modernising our vacation policy to a more flexible model was a natural next step," explains Hogan in the internal memo.
The news outlet further reports that the changes will start on January 16th and mean even new Microsoft employees don't need to wait to accrue vacation time anymore.
"Microsoft will offer 10 corporate holidays, leaves of absence, sick and mental health time off, and time away from jury duty or bereavement alongside this new unlimited time off policy. Employees that have an unused vacation balance will get a one-time payout in April."
According to LinkedIn News, the software giant said it adopted the system, which also saves its administrative costs, in response to more flexible work schedules. While some celebrate unlimited vacation policies, critics say they can often have the reverse effect, in that workers will take less time than they would with a limited amount of vacation days.
Microsoft is not the first technology behemoth to offer unlimited vacation days. Salesforce, Oracle, Netflix, and LinkedIn, which is owned by Microsoft, all provide employees with unlimited time off.