Microsoft layoff: Employees offered up to 39 weeks' pay, stock vesting; here's who gets what

After announcing on Monday that it would lay off around 4,800 employees (or 2.1% of its global workforce), Microsoft said the affected workers would receive severance packages of up to 39 weeks' base pay, according to a Business Insider report.

Who gets what? Here's how Microsoft's severance package breaks down

Microsoft's severance package varies by employee level, the report stated. Those working at internal levels 64 and below will receive one week of base pay for every six months of service, while those at levels 65 to 67 will receive two weeks of base pay for the same period.

Executives at level 68 and above will have a different compensation plan.

In addition to severance pay, eligible employees at levels 67 and below will continue to receive regular stock vesting for six or 12 months, depending on their tenure. The company will also provide 6 months of paid health insurance, with the option to extend coverage for an additional 12 months through COBRA.

Those terms are similar to those the company offered earlier this year in its Voluntary Retirement Program buyouts, the Business Insider report revealed

“Our business is changing,” Microsoft said on layoffs

The job cuts come as Microsoft looks to streamline costs while continuing to invest heavily in growth. The company is expected to spend about $190 billion in capital expenditures this year, primarily on expanding artificial intelligence infrastructure.

The cuts include the deepest overhaul in Xbox's history, with approximately 3,200 gaming jobs to be shed over the coming fiscal year, four game studios being spun off or sold, and a fifth entering a review process that could lead to closure, the company said.

"Our business is changing because the world around it is changing," Amy Coleman, Microsoft's executive vice president, wrote in a memo to all employees.

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

The announcement is the latest in a string of mass layoffs by the technology giant as it spends massive amounts of money to stay in the artificial intelligence race, with companies investing tens of billions of dollars in AI-ready data centers and computing power.

Severance package offered by Meta, Salesforce

The US severance package includes a minimum of 60 days of base pay during which employees remain on the payroll, up to a maximum of 39 weeks for most employees, based on seniority and tenure.

Salesforce, which recently conducted layoffs, has a standard severance package of a minimum of nine weeks and a maximum of 30 weeks of base pay. Oracle offered laid-off US employees four weeks' base salary, plus one week per additional year of employment, up to 26 weeks, as severance.

Meta, meanwhile, recently offered laid-off US employees a severance package including 16 weeks — or 4 months — of base pay, plus 2 weeks for every year of continuous employment.