Microsoft has unveiled a comprehensive severance package for thousands of employees affected by its latest round of layoffs, offering eligible workers in the United States up to 39 weeks of base pay along with extended stock benefits and healthcare coverage. The move comes after the technology giant announced the elimination of nearly 4,800 jobs worldwide, representing about 2.1 per cent of its global workforce, as part of a broader restructuring aimed at streamlining operations and supporting long-term investments in artificial intelligence.
According to details shared with employees, the severance benefits will vary depending on an individual’s seniority and length of service with the company. Employees in lower and mid-level positions will receive severance pay calculated on the basis of their tenure, while senior executives will be covered under a separate compensation framework. The package also includes continued vesting of stock awards for eligible employees and several months of company-funded health insurance, providing additional financial support during the transition.
For most affected employees in the US, Microsoft has guaranteed a minimum of 60 days of base salary, with the total payout extending up to 39 weeks for those with longer service records. Employees at internal levels 64 and below are expected to receive one week of base pay for every six months of service, while those in levels 65 to 67 will receive two weeks of pay for every six months worked. Executives at level 68 and above will receive benefits under a different severance policy.
In addition to salary compensation, eligible employees will continue to receive stock vesting for six to twelve months depending on their years of service. Microsoft will also provide six months of paid healthcare coverage, after which workers may opt to continue their insurance through the COBRA programme for up to another year at their own expense. The benefits closely resemble those offered under the company’s voluntary retirement programme introduced earlier, although the duration of healthcare support has been reduced.
The latest layoffs are concentrated largely in Microsoft’s commercial sales division and Xbox gaming business. Reports indicate that approximately 1,600 jobs are being eliminated from the Xbox unit alone as the company undertakes a major overhaul of its gaming operations. Microsoft is also planning structural changes across several business segments to improve efficiency and align resources with its evolving strategic priorities.
Chief People Officer Amy Coleman told employees that the job reductions should not be viewed as positions being directly replaced by artificial intelligence. Instead, she said the company is adapting to rapid changes across the technology industry, where AI is transforming workflows, productivity and business models. Coleman added that Microsoft remains committed to supporting affected employees and minimising the impact of future workforce reductions wherever possible.
The restructuring reflects a broader trend across the technology sector, where major companies continue to trim workforces while simultaneously increasing investments in AI infrastructure and digital transformation. Microsoft has been spending billions of dollars to expand its AI capabilities, including cloud infrastructure and generative AI technologies, prompting the company to rebalance resources and reduce costs in other areas.
While the layoffs mark another significant workforce reduction for Microsoft, the company has attempted to cushion the impact by offering one of the more generous severance packages seen in the technology industry. The combination of extended salary payments, stock vesting and healthcare benefits is expected to provide financial stability to many affected employees as they seek new career opportunities amid an increasingly competitive technology job market.
