Microsoft layoffs: What employees will receive in severance
What's the story
Microsoft has announced a major layoff, with plans to cut around 4,800 jobs or about 2.1% of its global workforce. The company is restructuring its sales and Xbox divisions while investing heavily in artificial intelligence (AI) infrastructure. The tech giant's severance package for laid-off employees includes up to 39 weeks of base pay, continued stock vesting, and health insurance coverage.
Compensation breakdown
Minimum of 60 days base pay
The severance package starts with a minimum of 60 days of base pay, during which affected employees will remain on Microsoft's payroll. For most employees, the total payout can go up to a maximum of 39 weeks of base salary, depending on their role and years of service. Employees at internal levels 64 and below will get one week of base pay for every six months they have worked.
Additional perks
Stock vesting and health insurance coverage extended
Along with salary payments, employees at levels 67 and below will continue receiving regular stock vesting for either six or 12 months, depending on their tenure with the company. Microsoft is also extending healthcare benefits as part of the package. Laid-off employees will get six months of paid health insurance coverage, followed by an option to continue coverage for another year through COBRA at their own expense.
Investment strategy
Microsoft boosts AI spending at expense of workforce
The layoffs come as Microsoft continues to increase spending on AI. The company is expected to invest around $190 billion in capital expenditures this year, with a significant portion allocated to expanding AI infrastructure and data center capacity. According to Microsoft Chief People Officer Amy Coleman, the latest workforce reduction largely affects employees in the sales organization and the Xbox gaming division.
Industry comparison
How severance packages compare to other tech firms
Compared with several other technology companies, Microsoft's severance package is relatively more generous. Salesforce offers between nine and 30 weeks of base pay, Oracle provides up to 26 weeks depending on tenure, while Meta recently offered 16 weeks of base pay along with two additional weeks for every year of continuous service.