Microsoft announced to cut around 4,800 jobs, or about 2.1% of its global workforce earlier this week. As part of the layoffs, the company is offering severance packages to affected employees in the US. According to documents reviewed by Business Insider, the package includes up to 39 weeks of base pay for most employees, depending on their role and years of service. Laid-off workers will also receive continued stock vesting for eligible employees, paid health insurance for up to six months, and the option to extend health coverage.
Microsoft offers severance package for laid-off US employees
According to Business Insider, affected US employees will receive a minimum of 60 days of base pay, during which they will remain on Microsoft’s payroll. As mentioned above, most employees will be eligible to receive up to 39 weeks of base pay, depending on their seniority and length of service.Employees at internal 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 of service. Microsoft has a separate severance package for executives at level 68 and above.The company is also offering:
- Continued stock vesting for six or 12 months for eligible employees at level 67 and below, based on years of service.
- Six months of paid health insurance.
- An additional 12 months of optional COBRA health coverage.
According to the report, the terms are similar to Microsoft’s Voluntary Retirement Program announced earlier this year, although the latest layoffs include shorter health insurance coverage.
Microsoft layoffs focus on sales and Xbox teams
The latest job cuts mainly affect Microsoft’s sales division and Xbox gaming business. Microsoft Chief People Officer Amy Coleman told employees that the company’s Xbox division also plans to reduce its workforce by 20% by the end of June.The layoffs reportedly come as Microsoft continues to reduce costs while planning about $190 billion in capital spending this year, with much of the investment expected to go toward expanding its AI infrastructure.