How do fired Microsoft employees receive compensation?
Documents about Microsoft's severance pay, collected by Business Insider, show that employees in the 2.1% group laid off in the US will receive a minimum of 60 days of salary and a maximum of 39 weeks of basic salary depending on seniority. The company currently divides employee levels from 59 to 80, in which Level 59 (L59) is for newly graduated engineers with good achievements, level above L70 is for leaders, and L80 is reserved for CEOs.
In particular, employees L64 and below will receive one week of basic salary for every 6 months of work, while levels 65-67 will receive two weeks of basic salary for the same period. There will be a separate benefit package for leadership groups L68 and above.
In addition, Microsoft also offers a periodic stock allocation program for 6 months and 12 months for L67 and below based on seniority after they leave. This group also receives an additional 6 months of health insurance and 12 months of optional COBRA coverage.
COBRA, or the Comprehensive Budget Reconciliation Act, is a US law that allows employees and their families to continue using their previous employer's health insurance plan for a certain period of time, applicable to businesses with 20 or more employees.
According to Levels.fyi's summary, Microsoft currently pays a basic annual salary of about 139,000 USD for L60, about 166,000 USD for L62 and about 204,000 USD for L64, not including stock bonuses and benefits. At the higher end, stocks are the main income.
TechCrunch assessed that Microsoft's maximum subsidy of 39 weeks' salary is "more generous" than offers from some other competing technology companies. For example, Saleforce has a minimum 9-week severance package and a maximum of 30 weeks of base salary; Oracle applies 4-26 week packages...
Previously, the 10-K report sent by Microsoft to the US Securities and Exchange Commission (SEC) showed that, as of June 30, the company had 228,000 employees globally, with 125,000 in the US alone. The reduction of 2.1% of personnel, equivalent to 4,800 positions globally (1,600 employees were laid off on July 6), means the company currently has more than 223,000 employees.
In addition to layoffs, Microsoft also applies a voluntary retirement program. Employees in the US with total years of service plus age 70 or older are eligible to participate in this program. The benefit package includes 5 years of health insurance, a one-time severance pay and an additional 6 months of stock.
According to Reuters, the huge wave of investment in AI by large technology corporations, expected to exceed 700 billion USD this year, is putting pressure on them to prove the effectiveness of this technology, while offsetting the increasing costs of deploying AI on an enterprise-wide scale. However, Microsoft HR Director Amy Coleman emphasized "the positions being laid off today are not being replaced by AI", but added that "it is true that AI is changing the way work is done".
Previously, on May 20, Meta also cut 8,000 positions and explained the layoff issue related to financial investments. The company is increasing capital spending in 2026 to $125-145 billion, due to "higher component prices this year and additional data center costs for AI computing power in the coming years."