Microsoft layoffs: Here's what impacted employees will get in severance

Microsoft announced to reduce 2.1% of its workforce, impacting over 4800 employees globally. The number also includes 3200 employees from the Xbox division, and the remaining from other divisions. The move comes amid broader cost-cutting efforts driven by artificial intelligence (AI). 

Impacted employees have reportedly been informed of the decision, and Microsoft is also providing them with severance pay and additional support for a smooth transition. Here’s what the impacted Microsoft employees are getting in severance pay.

Must read: Microsoft to cut 4,800 jobs, reshape Xbox business and spin off gaming studios

Microsoft severance pay

According to a report by Business Insider, Microsoft will give up to 39 weeks' base pay to employees based in the US. Every laid-off employee gets at least 60 days of base salary.
During these 60 days, employees will remain on Microsoft's payroll, and they will continue to receive their regular pay and, generally, their benefits.

Employees at levels 64 and below will receive one week of base salary for every six months of service. Employees at levels 65 to 67 will receive two weeks of base salary for every six months of service. Lastly, executives at level 68 and above will receive a different severance package. The details have not been revealed.

Must read: Microsoft launches a $2 billion AI Unit, employs 6,000 forward-deployment engineers

Apart from this, employees at level 67 and below will continue to receive company stock that was already scheduled to vest for 6 months or 12 months, depending on their years of service. They will also get six months of health insurance coverage, and they can also choose to continue their insurance through COBRA for up to another 12 months.

The severance packages are largely similar to the Voluntary Retirement Program the company introduced earlier this year. 

The layoffs come as another major restructuring plan for Microsoft, as last year it laid off 9000 of its employees amid AI restructuring, and the trend is continuing in 2026.