Microsoft is offering laid-off US employees up to 39 weeks of base pay, stock vesting, and health coverage as it cuts 4,800 jobs across its Xbox and commercial sales divisions, a severance package that tops competing offers from Salesforce, Oracle, and Meta. The US severance plan guarantees a minimum of 60 days of base pay during which employees stay on the payroll, then adds tenure-based weeks up to a cap of 39 weeks, according to offers reviewed by Business Insider. Employees at internal levels 64 and below receive one week of base pay per six months of service.
Those at levels 65 to 67 get two weeks per six months. A separate formula applies to executives at level 68 and above.
Microsoft is also offering continued regular stock vesting for six or 12 months for levels 67 and below, depending on years of service, plus six months of paid health insurance and an additional 12 months of optional COBRA coverage. The terms mirror what Microsoft offered earlier this year in its Voluntary Retirement Program buyouts, with one difference: the layoff package includes shorter health insurance durations.
By comparison, Salesforce's standard severance runs a minimum of nine weeks to a maximum of 30 weeks of base pay. Oracle offered laid-off US employees four weeks of base salary plus one week per additional year, up to 26 weeks.
Meta recently offered 16 weeks of base pay plus two weeks for every year of service.
Microsoft chief people officer Amy Coleman announced the cuts on Monday in an internal memo, saying the roles eliminated are not being replaced by AI. "AI is changing how work gets done," Coleman wrote. "Some of the tasks we do every day can now be automated."
About 1,600 of the 4,800 job losses hit the Xbox division on Monday, with plans to eliminate roughly 20 percent of Xbox roles by the end of the fiscal year, per The Verge. Microsoft is selling off four Xbox studios and weighing the sale of another as part of what Xbox CEO Asha Sharma called the biggest restructuring in the gaming division's history.
The cuts come as Microsoft spends heavily on AI infrastructure, including $190 billion in capital expenditures this year. The company's stock has fallen roughly 30 percent over the past nine months, wiping out about $1.2 trillion in market value.
Microsoft had tried to soften the layoffs through a voluntary retirement program that let employees with combined age and years of service totaling 70 or more exit with five years of healthcare, a lump-sum cash payment, and six months of unvested stock option vesting. More than 30 percent of the roughly 8,750 eligible US employees accepted the offer, Coleman said, reducing the number of forced cuts.
