Microsoft has announced severance packages for the employees it has recently laid off as part of a wider restructuring aimed at reducing costs and building AI related infrastructure.
The company has laid off around 4,800 employees worldwide, equal to 2.1 per cent of its workforce. The biggest impact is at Xbox, where 1,600 employees are being let go in the first round.
For employees in the US, severance packages vary by tenure and internal level, as reported by Business Insider. Staff at levels 64 and below will receive one week of base pay for every six months of service. Those at levels 65 to 67 will receive two weeks of base pay for every six months worked. Employees at level 68 and above have separate arrangements. Overall, severance ranges from a minimum of 60 days to a maximum of 39 weeks of base pay.
In addition to cash compensation, eligible employees at level 67 and below will continue to vest stock for six to 12 months, depending on years of service.
Microsoft is also covering health insurance for six months, with the option to extend coverage for another year through COBRA.
The layoffs are concentrated in sales and Xbox gaming, where the company is also divesting four studios and preparing to exit another. Leadership has acknowledged that margins in the gaming business are significantly lower than competitors, prompting a reset of content, platform, and operating models.
