Microsoft offers 39 weeks' salary, stock benefits and healthcare to laid-off employees

Microsoft has detailed the severance package for employees affected by its latest round of layoffs, offering up to 39 weeks of base salary, continued stock vesting for eligible workers and extended healthcare benefits. The announcement follows the company's decision to cut around 4,800 jobs, representing 2.1% of its global workforce.

The benefits vary by employee level and length of service. They mirror the terms Microsoft offered earlier this year through its Voluntary Retirement Program, Business Insider reported.

How Microsoft's severance package works

Employees will receive different severance payouts based on their internal job level. The package includes:

• Employees at internal levels 64 and below will receive one week's base salary for every six months of service.
• Employees at levels 65 to 67 will receive two weeks' base salary for every six months of service.
• Executives at level 68 and above will receive compensation under a separate severance plan.
• Most eligible US employees will receive a minimum of 60 days' base pay while remaining on the payroll, with total severance extending to a maximum of 39 weeks, depending on seniority and tenure.

Stock awards and healthcare included

Beyond salary payments, Microsoft is extending additional support for eligible employees. The company will provide:

• Continued stock vesting for employees at levels 67 and below for six or 12 months, depending on their length of service.
• Six months of company-paid health insurance.
• An option to extend healthcare coverage for up to 12 additional months through COBRA.

These terms are broadly consistent with Microsoft's earlier voluntary retirement buyout programme.

Layoffs come amid AI spending push

The workforce reduction comes as Microsoft continues to restructure parts of its business while maintaining significant investment in artificial intelligence infrastructure.

The company is expected to spend about $190 billion in capital expenditure this year, primarily on expanding AI-related data centres and computing capacity.

The latest restructuring also includes significant changes within Microsoft's gaming business. The company said approximately 3,200 gaming roles will be eliminated over the coming fiscal year, alongside plans to spin off or sell four game studios, while a fifth studio is under review and could face closure.

In a memo to employees, Amy Coleman, Microsoft's Executive Vice President, said the company's business is evolving alongside broader industry changes.

"Companies don't get to choose whether their industry changes; they only get to choose whether they change with it."

She also wrote, "Our business is changing because the world around it is changing."

How Microsoft's package compares with rivals

Recent layoffs across the technology sector have been accompanied by varying severance packages. According to the report:

• Meta recently offered laid-off US employees 16 weeks of base pay, plus two additional weeks for every year of continuous service.
• Salesforce provides severance ranging from nine to 30 weeks of base pay.
• Oracle offers four weeks' base salary, plus one additional week for each completed year of service, capped at 26 weeks.

The comparison highlights Microsoft's relatively generous upper limit on severance, although the final payout depends on an employee's grade, tenure and eligibility.