Microsoft offers generous severance to 4,800 laid-off staff, including up to 39 weeks' pay and extended stock vesting

Hillary Remy Thu, July 9, 2026 at 3:17 PM PDT 4 min read

• MSFT +0.08%

Tech layoff announcements often follow a predictable script: a company memo, headlines about job cuts, and executives speaking about realigning for the future. Then the story moves on, leaving those who lost their income to sort 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 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 Pay

Severance documents reviewed by Fast Company show that affected U.S. Microsoft employees remain on payroll for at least 60 days after notification. On top of that, additional weeks of base pay are awarded based on tenure and seniority:

• Junior and mid-level staff: One week of pay for every six months worked.
• Principal and director-level employees: Two weeks per six months, with a cap of 39 weeks.
• Executives: Fall under a separate arrangement.

For comparison:

• Salesforce: Recent severance ran between 9 and 30 weeks.
• Oracle: Capped at 26 weeks.
• Meta: Offered 16 weeks plus two weeks 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 Package

Beyond cash severance, Microsoft is keeping stock vesting active for six to 12 months after employees leave, depending on how long they have been at the company. At a company like Microsoft, equity is a significant part of compensation. Allowing vesting to continue after exit means employees keep collecting shares they already earned rather than losing them mid-cycle.

Related: Microsoft cuts thousands as Xbox faces rude awakening

Health coverage is another key component. Microsoft is covering six months of employer-paid insurance, with the option to continue for another year through COBRA. For anyone who has experienced a job loss in the U.S., health coverage is often one of the first expenses to become costly — six months paid coverage helps relieve some of that pressure.

What Microsoft Told Employees About the Cuts

Amy 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 cheap
• Microsoft has bad news for a key AI partner
• Microsoft reveals strange new plan for users

As 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 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 leave. — Michael/Getty Images