Microsoft's severance package for laid-off workers includes up to 39 weeks of pay and health benefits
Microsoft is extending a generous severance package that can reach up to 39 weeks of base pay for most employees in the United States who are impacted by the tech giant's most recent round of layoffs, according to reports.
Microsoft announced earlier this week that it is laying off around 4,800 roles, or about 2.1% of its global workforce, in a bid to "adjust resources and roles" within the organisation.
Amy Coleman, EVP and chief people officer at Microsoft, said impacted employees will be provided with "financial support and resources to help them take their next step."
Included in this promised financial support and resources is a severance package with a minimum of 60 days of base pay, during which employees will remain on the payroll. But based on seniority and tenure, this can get up to a maximum of 39 weeks of base pay for most employees, according to the report.
It noted that employees at internal levels 64 and below will receive one week of base pay per six months of service. Those at levels 65 to 67 will receive two weeks of base pay per six months of service.
Executives at levels 68 and higher have a separate package, according to the report.
Additionally, Microsoft is also offering six months of paid health insurance coverage, as well as an additional 12 months of optional COBRA coverage. Regular stock vesting for six or 12 months will be continuously offered for employees at internal levels 67 and below, based on years of service.
According to Business Insider, the benefits are similar to what Microsoft offered in its Voluntary Retirement Programme, which saw the participation of more than 30% of eligible Microsoft employees.
The layoffs, however, come with a shorter health insurance coverage duration than the Voluntary Retirement Programme.
Microsoft's severance package is standing out for being more generous than other major corporations that have been laying off recently.
Salesforce has a standard severance package of a minimum of nine weeks and a maximum of 30 weeks of base pay. Meta offers a severance package covering 16 weeks in base pay, with an additional two weeks for every year of continuous employment, according to Business Insider.
Layoffs at Microsoft, Xbox
Microsoft's layoffs have been attributed to an organisational restructure amid shifts in customers' needs. Coleman, however, clarified that the eliminated roles are not being replaced by AI.
Xbox, Microsoft's video gaming brand, is one of the hardest hit units in the tech giant's layoffs.
Kevin LaChapelle, Xbox Vice President, announced on LinkedIn that he is included in the layoffs.
"This ends my 37 years at Microsoft. I have worked in many different parts of the company, and I will say my fondest memories are of leading the team of very talented engineers who built the Xbox Backward Compatibility programme," LaChapelle said.
"I look forward to watching how Xbox evolves going forward and I wish the team nothing but success."
Xbox CEO Asha Sharma described the changes at the unit as the "most significant restructure" in its history.
"I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox," Sharma previously said on X.
"Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved Xbox. Today's decisions do not reflect their talent or dedication."
