Microsoft Offers Laid-Off Workers Up to 39 Weeks' Pay and 18 Months of Health Coverage, Beating Big Tech Rivals

There's an odd contradiction sitting at the heart of Microsoft's latest layoffs. The company is spending close to $190 billion this year building out AI infrastructure, more than almost any single company has ever committed to one category of spending, and in the same breath, it's cutting roughly 4,800 jobs, about 2.1% of its total workforce.

That contradiction is exactly why the exit terms Microsoft is offering matter. When a company has that much cash flowing into growth, how it treats the people it's letting go says something about priorities, not necessity.

What Departing Employees Actually Get

According to a Business Insider report, the severance package follows a tiered structure built around internal seniority levels. Everyone gets at least 60 days of base pay while technically still on payroll, a built-in cushion before the clock even starts on the real severance calculation.

From there, it scales with tenure. Staff at level 64 and under earn one week of pay for every six months they've worked at the company. Employees one tier up, levels 65 through 67, get double that rate: two weeks per six months served. At the very top, level 68 and above, executives are handled through a separate, unpublished arrangement. Do the math on a long-tenured mid-level employee, and the payout tops out at 39 weeks, nearly nine months of income.

Pay isn't the only thing continuing. Stock that hadn't yet vested keeps vesting for six to twelve months, again scaled by how long someone has been there, for anyone at level 67 or below. And health coverage stretches out further than the severance pay itself: six months fully paid by Microsoft, then a further year of optional COBRA coverage the employee can choose to keep paying into. Stack it together and someone affected by these cuts could have health insurance access for a year and a half.

Worth noting-this isn't Microsoft's first time offering something like this in 2026. Business Insider reported that employees who took the company's Voluntary Retirement Program buyout earlier this year got a nearly identical package, with one exception, the health insurance runway back then was longer than what's on the table now.

Oracle's Very Different Math

Set Microsoft's numbers next to Oracle's recent layoff terms and the difference is hard to miss. Oracle's formula started employees at four weeks of base pay, then added one additional week for each year they'd worked there, but capped the entire package at 26 weeks no matter how long someone had been employed.

Run the numbers on a hypothetical employee with, say, 15 years at each company. At Oracle, that person hits the 26-week ceiling regardless. At Microsoft, someone with that same tenure at level 65 or above could clear 39 weeks outright, a difference of 13 full weeks of pay, more than three months. Oracle's public terms also made no mention of continued stock vesting or an extended health insurance bridge, two pieces that make Microsoft's offer heavier still.

Salesforce and Meta Sit Somewhere in Between

Neither Salesforce nor Meta comes close to matching Microsoft's ceiling, though both land ahead of Oracle.

Salesforce's standard package during its own recent layoffs ranged from nine weeks at the low end to 30 weeks at the high end, nine weeks short of what Microsoft is offering its longest-tenured departing staff.

Meta structured its offer differently: a flat 16 weeks of base pay (four months), plus two additional weeks for every year of continuous service. That formula rewards long tenure more aggressively than Microsoft's does on a per-year basis, meaning an employee with a decade-plus at Meta could theoretically approach or even match Microsoft's numbers. But for the typical Meta employee with a more average tenure, the total still falls short of Microsoft's 39-week cap.

Reading Between the Numbers

Severance has quietly turned into something companies use to manage their reputation as much as their obligations. In an industry where the same companies laying off thousands of workers are simultaneously posting record AI spending, the size of a severance check has become a visible signal, one way for a company to say it can afford to be generous even while it's shrinking.

Whether Microsoft's package becomes the benchmark other tech companies feel pressure to match, or whether it stays an outlier reserved for one of the few companies with the balance sheet to offer it, will likely become clearer as more of this year's layoffs play out across the industry.

Read More: Microsoft Cuts 4,800 Jobs to Prioritise AI Growth, Xbox Hit Hardest