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Microsoft has shared details of the severance package for employees affected by its latest round of layoffs, offering eligible US workers up to 39 weeks of base pay along with continued stock vesting and healthcare benefits. The move comes days after the tech giant confirmed it would eliminate around 4,800 jobs, or roughly 2.1% of its global workforce, as part of a broader restructuring.
The latest layoffs have largely affected Microsoft’s commercial sales division and Xbox business as the company continues to realign operations and increase investments in artificial intelligence.
According to documents reviewed by Business Insider, affected US employees will remain on Microsoft’s payroll for at least 60 days. Beyond that, severance compensation will depend on an employee’s tenure and internal level.
Employees at levels 64 and below will receive one week of base pay for every six months of service. Those in levels 65 to 67 will receive two weeks of base pay for every six months worked, with payouts capped at 39 weeks. Executives covered under higher job levels will receive a separate severance package.
The package extends beyond salary. Microsoft is allowing eligible employees to continue receiving stock vesting for six to 12 months, depending on their years of service.
The company will also provide six months of employer-paid health insurance, followed by an option to continue coverage for another year under COBRA at the employee’s expense. These benefits are broadly in line with Microsoft’s earlier voluntary retirement program announced this year, although the healthcare coverage period is shorter.
Also Read: Microsoft’s Next Layoffs Could Reshape Xbox Gaming Division as 5,700 Jobs on the Line
Microsoft has said the layoffs are part of organizational changes rather than the direct replacement of affected roles with AI. The company has previously stated that it has redeployed thousands of employees into new positions wherever possible, but restructuring remains necessary as it reshapes teams around long-term priorities.
The latest workforce reduction follows Microsoft’s continued push to streamline operations while committing billions of dollars to AI infrastructure and next-generation technologies.
