Microsoft layoff: Employees offered up to 39 weeks’ pay, stock vesting; here’s who gets what
After announcing Monday that it would lay off nearly 4,800 employees (or 2.1% of its global workforce), Microsoft said affected employees would receive severance packages of up to 39 weeks of base pay, according to a Business Insider report.
Who gets what? Here’s how Microsoft’s severance package breaks down.
The report stated that Microsoft’s severance package varies depending on employee level. Employees at internal levels 64 and lower will receive one week’s base pay for every six months of service, while employees at levels 65 through 67 will receive two weeks’ 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 age 67 and below will continue to receive regular stock vestments 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.
These terms are similar to those the company offered in its Voluntary Retirement Program acquisitions earlier this year, according to a Business Insider report
“Our business is changing,” Microsoft said about layoffs
The layoffs come as Microsoft looks to streamline costs while continuing to invest heavily in growth. The company is expected to spend approximately $190 billion in capital expenditures this year, primarily on the expansion of its artificial intelligence infrastructure.
The company said the cuts include the deepest overhaul in Xbox history, with about 3,200 game studios to be laid off in the next fiscal year, four game studios to be closed or sold, and a fifth to enter a review process that could lead to closure.
“Our business is changing because the world around us is changing,” Amy Coleman, Microsoft’s executive vice president, wrote in a memo to all employees.
“Companies can’t choose whether their industry will change; they can only choose whether they will change with it.”
The announcement is the latest in a series of mass layoffs by the tech giant, which has spent huge amounts of money to stay in the AI race, with companies investing tens of billions of dollars in AI-ready data centers and computing power.
Meta, severance package offered by Salesforce
The U.S. severance package includes at least 60 days of base pay during which employees will remain on the payroll, up to a maximum of 39 weeks for most employees, depending on seniority and tenure.
Salesforce, which has recently made 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 U.S. employees four weeks of base salary plus up to 26 weeks of severance pay, one week for each additional year of work.
Meanwhile, Meta recently offered laid-off US employees a severance package that includes 16 weeks (or 4 months) of base pay plus 2 weeks of permanent employment each year.
