Microsoft is offering 9 months of salary for free to some laid-off employees

Microsoft just announced fresh layoffs affecting around 4,800 employees globally, but many affected workers in the US will receive some severance benefits. In some cases, employees could get up to 39 weeks of base pay, along with stock vesting and healthcare support.

In Short

• Microsoft is offering around 9 months of base salary to some laid-off US employees
• The company is cutting about 4,800 jobs as it ramps up spending on AI infrastructure
• Eligible employees will also receive continued stock vesting and healthcare benefits

Microsoft has begun another round of job cuts, but the company is also offering one of the good severance packages seen in the tech industry. According to Business Insider, some laid-off employees in the US will receive up to 39 weeks of base salary, which is roughly nine months' pay, depending on their role and how long they have worked at the company.

The latest layoffs affect around 4,800 employees globally, or about 2.1 percent of Microsoft's workforce. According to the report, the severance package for US employees includes a minimum of 60 days of base pay while workers remain on the payroll. After that, eligible employees can receive additional severance based on their seniority and years of service, with the total payout reaching as much as 39 weeks of base salary for most employees.

Who is eligible for Microsoft's severance package?

The amount each employee receives depends on their internal level. "Employees at levels 64 and below will receive one week of base pay" for every six months they have worked at Microsoft. Those at "levels 65 to 67 will receive two weeks of base pay for every six months of service." Executives at higher levels are covered under a separate compensation plan.

The support goes beyond salary. Microsoft is also offering continued stock vesting for six or 12 months for eligible employees, depending on their tenure. In addition, affected workers will receive six months of paid health insurance, along with the option to continue healthcare coverage for another year through COBRA at their own expense.

The package is broadly similar to the voluntary retirement offers Microsoft rolled out earlier this year, although the latest layoffs come with a shorter duration of company-paid health coverage.

The job cuts come as Microsoft continues to invest aggressively in artificial intelligence. The company is said to spend around $190 billion in capital expenditure this year, with a significant portion going toward expanding AI infrastructure, including data centres and cloud computing capacity.

The layoffs are hitting multiple divisions, but Microsoft's sales teams and Xbox gaming business are among the most affected. In an internal message, Xbox leadership described the move as the biggest restructuring in the platform's history. Around 3,200 jobs are expected to be eliminated across Xbox during the current financial year, including approximately 1,600 roles cut immediately.

In the memo, Xbox leadership acknowledged the difficult decision, saying, "Today's decisions do not reflect their talent or dedication." The message explained that the gaming business has been struggling with lower profit margins, rising costs and a slowdown in hardware growth. It also said the company plans to simplify its organisational structure by reducing management layers and focusing investments on priority projects.

Compared with other major technology companies, Microsoft's severance package stands out. Business Insider reports that Salesforce typically offers between nine and 30 weeks of base pay, Oracle provides up to 26 weeks depending on years of service, while Meta recently offered laid-off US employees 16 weeks of base salary plus an additional two weeks for every year they had worked at the company.

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