Industry Odisha Bureau, July 8: Microsoft has announced layoffs for about 4800 employees as part of a broader cost cutting exercise. This comes after the decision of a major restructuring of its Xbox gaming division. With this, the company will be laying off about 2 percent of its global workforce.
This move comes as technology companies continue to reduce costs while increasing investments in AI. Amazon and Meta have also announced thousands of job cuts this year as AI spending continues to rise.
According to official reports, employees affected by the layoffs in the United States will receive severance packages that include up to 39 weeks of base salary. Further, the company will also provide a minimum of 60 days base pay, during which employees will remain under Microsoft’s payroll. After which, most employees will receive additional compensation based on their role and years of service. The total severance will be capped at about 39 weeks of base pay.
Employees at internal levels 64 and below will receive one week’s salary for every six months of service. Meanwhile, those at levels 65 to 67 will receive two weeks’ salary for the same period/ Executives at level 68 and above will receive benefits under a separate severance plan.
Microsoft will also continue stock vesting for eligible employees at levels 67 and below for a period of six to 12 months. In addition to which, the affected employees will be receiving up to six months of paid health insurance. They will also have the option to extend coverage through COBRA for up to another year.
The announcement of Microsoft layoffs comes after a difficult first half of 2026 for Microsoft’s stock. Notably, company stocks have fallen nearly 23 percent. This marks Microsoft’s weakest first half performance since 2022, as reported by Reuters.
