Tech layoff announcements follow a predictable script. A company memo goes out. The number of jobs cut makes the headlines. Executives talk about realigning for the future. Then the story moves on, and the people who just lost their income are left sorting through the details on their own.Microsoft published those details this week. On July 6, the company cut roughly 4,800 jobs across Xbox and its commercial sales division. Alongside the announcement came the specifics of what laid-off U.S. employees are being offered, and the package is more generous than what several of Microsoft’s peers have provided in their own recent cuts.Microsoft severance package: Up to 39 weeks of base paySeverance documents reviewed by Fast Company show that affected U.S. Microsoft employees stay on payroll for at least 60 days after notification. On top of that, additional weeks of base pay come based on tenure and seniority.Junior and mid-level staff earn one week of pay for every six months worked. Principal and director-level employees earn two weeks per six months, with the total capped at 39 weeks. Executives fall under a separate arrangement.Salesforce’s recent severance ran between nine and 30 weeks. Oracle capped at 26. Meta offered 16 weeks plus two per year of service, according to Technobezz. Microsoft’s cap of 39 weeks is higher than any of those.Stock vesting and health coverage: What else is in Microsoft’s exit packageBeyond the cash, Microsoft is keeping stock vesting active for six to 12 months after employees leave, depending on how long they’ve been at the company. At a place like Microsoft, equity is a big part of how people get paid. Letting vesting continue after the exit means employees keep collecting on shares they already earned rather than losing them mid-cycle.Related: Microsoft cuts thousands as Xbox faces rude awakeningHealth coverage is the other piece. Microsoft is covering six months of employer-paid insurance, with the option to continue for another year through COBRA. For anyone who has been through a job loss in the U.S., health coverage is usually one of the first things that gets expensive fast. Six months paid takes some of that pressure off.What Microsoft told employees about the cutsAmy Coleman, Microsoft’s Chief People Officer, sent the internal memo on July 6. “Our business is changing because the world around it is changing,” Coleman wrote, according to TechCrunch. “Companies don’t get to choose whether their industry changes; they only get to choose whether they change with it.”She also addressed the AI question. “The roles eliminated today are not being replaced by AI. What is true is that AI is changing how work gets done.”More Microsoft:Microsoft may be done making Xbox cheapMicrosoft has bad news for a key AI partnerMicrosoft reveals strange new plan for usersAs TheStreet has reported, workers across Big Tech have been pushing back on that framing for months. Microsoft is spending heavily on AI infrastructure this year. The layoffs and the AI buildout are happening on the same balance sheet.Xbox CEO Asha Sharma’s memo to the gaming team was more direct. “Our business today is not healthy,” she wrote. She cited margins running several times below comparable platform businesses and described the Xbox restructuring as the biggest in the division’s history. About 1,600 roles were eliminated on July 6 with more planned through the fiscal year.
Beyond the cash, Microsoft is keeping stock vesting active for six to twelve months after employees leaveMichael/Getty Images
Microsoft layoffs and what’s happening across the tech industry in 2026This is the third significant round of cuts at Microsoft in under two years. The company eliminated more than 15,000 jobs in 2025 and offered voluntary buyouts to roughly 9,000 employees earlier this year. Amazon, Meta, and Oracle have all made large cuts in 2026, too, each while ramping up AI spending at the same time.Microsoft’s stock has been one of the weakest performers among large tech companies this year, falling sharply in the first half. Brad Smith, Microsoft’s president and vice chair, told GeekWire it comes down to basic business reality. “Microsoft can only be a strong employer if it has a successful business,” Smith said. “We have to adapt to change.”As TheStreet reported in June, Microsoft has repeatedly cut in divisions where the work doesn’t fit cleanly into its AI roadmap. The China Azure layoffs, the LinkedIn reductions, Xbox now. The thread running through all of it points in the same direction.What laid-off Microsoft employees should know about the severance offerThe 60-day payroll period is the most immediately useful part. It keeps a paycheck coming while the job search starts, which is a different situation than receiving a lump sum on the last day.An employee in India shared on the anonymous workplace app Blind that they were offered active employment through mid-October followed by several months of severance. “It’s a decent cushion, but I’m still stressed,” they wrote, according to Fast Company.The U.S. package runs more generous, but the stress piece doesn’t really change based on what the offer letter says.One more thing worth knowing: Severance agreements come with strings. Non-disparagement clauses are standard. Some roles carry non-compete language depending on state and job level. The payout is real. So is what gets signed away to collect it.Related: Microsoft CEO sends another shocking message to employees