Microsoft announced on 6 July that it was cutting roughly 4,800 jobs, representing about 2.1% of its global workforce, as part of a restructuring of its sales organisation and Xbox gaming division. The move marks the third significant round of redundancies at the company in under two years.
For affected U.S. employees, the company has outlined a severance package that starts with a minimum of 60 days of base pay, during which workers remain on the payroll. Total payouts can reach up to 39 weeks of base salary, with the exact amount determined by role level and length of service. Employees at internal levels 64 and below receive one week of base pay for every six months worked, while those at levels 65 to 67 — covering principal and director-level roles — receive two weeks for every six months of service.
Beyond cash, Microsoft is continuing stock vesting for laid-off employees for between six and twelve months after they leave, depending on their tenure. The company is also providing six months of continued health insurance coverage, plus an additional year of optional COBRA coverage for those who need it.
The cuts are taking place as Microsoft ramps up investment in artificial intelligence infrastructure. The company is expected to spend around $190 billion in capital expenditure this year, with a large share directed at AI and data centre expansion. Xbox CEO Asha Sharma described the gaming division's restructuring as the biggest in its history, citing unhealthy profit margins.
For working professionals in tech, the Microsoft case serves as a reminder to understand what a severance agreement contains before signing — including pay duration, equity treatment, and healthcare terms — as the details can vary significantly by seniority and how long someone has been with a company.
