Microsoft has detailed the severance benefits for employees impacted by its latest round of job cuts, with eligible U.S. workers receiving up to 39 weeks of base salary along with continued stock vesting and healthcare coverage. The announcement follows the tech giant’s confirmation that it will eliminate roughly 4,800 positions, or about 2.1% of its global workforce, as part of a broader restructuring effort.
The layoffs primarily affect Microsoft’s commercial sales division and Xbox business, as the company realigns operations and increases investments in artificial intelligence. According to documents reviewed by Business Insider, affected employees will remain on the payroll for at least 60 days. Severance compensation beyond that period depends on tenure and job level:
- Levels 64 and below: One week of base pay for every six months of service.
- Levels 65 to 67: Two weeks of base pay for every six months worked, capped at 39 weeks.
- Executives at higher levels: Receive a separate severance package.
In addition to salary, Microsoft allows eligible employees to continue receiving stock vesting for six to 12 months, based on years of service. The company will also provide six months of employer-paid health insurance, followed by an option to extend coverage for another year under COBRA at the employee’s expense. These benefits align with Microsoft’s earlier voluntary retirement program, though the healthcare coverage period is shorter.
Microsoft has stated these layoffs are part of organizational changes, not a direct replacement of roles with AI. The company has redeployed thousands of employees into new positions when possible but says restructuring remains necessary to reshape teams around long-term priorities. The reduction follows Microsoft’s ongoing push to streamline operations while committing billions to AI infrastructure and next-generation technologies.