Severance Pay Microsoft: Understanding Your Benefits

Microsoft's severance pay policy is designed to support departing employees through a transition period.

If you're a Microsoft employee who's been laid off, you may be eligible for severance pay, which can range from 10 to 20 weeks of pay, depending on your length of service.

Severance pay is usually paid out over a period of 10 to 20 weeks, and it's based on your regular pay rate.

In addition to severance pay, Microsoft also offers outplacement services to help you find a new job.

Microsoft has been through several rounds of layoffs over the years, with the most recent ones being in January 2025, when the company reduced the size of its security, experiences and devices, sales, and gaming teams.

In 2024, Microsoft Gaming announced that it would lay off approximately 650 employees, representing about 3% of its global workforce. This was followed by the company cutting product and program management roles to maintain profit margins.

Microsoft has a history of laying off employees due to recessions, downsizing, restructuring, cost-cutting measures, and shifts in operational focus. In fact, the company has cut its workforce by as much as 10% in the past, including a 10% reduction in its total sales force in 2017.

Here's a list of some of the notable layoffs at Microsoft:

Microsoft has also cut jobs in its home state of Washington, with 276 jobs being eliminated in June 2023. However, it's worth noting that some of these job cuts may have also affected employees in other locations.

Facing a layoff at Microsoft can be a challenging experience, but knowing your options is key. The tech industry has unique dynamics that can affect staff during a layoff.

If you've been let go from Microsoft, it's essential to review your employment agreement carefully, as individuals often work under specific employment contracts, bonus structures, or non-compete clauses that may impact their severance entitlements and future job prospects.

Your severance package should reflect everything you're owed, and it's crucial to contact a professional for a review.

If the employee accepts the severance pay agreement, the employer should ensure they uphold their end of the bargain. This includes providing a smooth severance pay experience to demonstrate a willingness to support employees' well-being, even after they're gone.

Here are some key responsibilities for employers to ensure a smooth severance pay experience:

Losing your job at Microsoft can be a major change that impacts your career trajectory and personal confidence.

Take your time to review all termination documents carefully before signing anything, and consider speaking with a lawyer to ensure you're fully informed and protected.

It's essential to document everything, including termination letters, severance offers, and correspondence with your employer, for future reference.

Use the Severance Pay Calculator to estimate what you're owed and understand your entitlements.

Contact an employment lawyer at Samfiru Tumarkin LLP to ensure your severance package reflects your full rights.

Proactively seeking new opportunities can boost your career and demonstrate your effort to find a new job, which is important in severance claims.

Wrongfully dismissed? Our firm can review your situation and advise you of potential next steps.

Severance pay is a type of compensation provided by employers to employees following termination. It can include up to 24 months' pay, based on factors like length of service, age, position, and job market conditions.

Severance pay can be more than just a lump sum, it can also include regular bonuses, commissions, and continued health or dental benefits, especially if they're critical for ongoing care.

Your employer's deadline to sign a severance offer isn't legally binding, so take your time to review it and get legal advice. You have up to two years from your termination date to file a claim.

Severance often applies even when employers claim cause, misclassify you as a contractor, end a fixed-term contract early, or make major changes to your job.

A severance package usually includes salary continuation for a set number of weeks, either paid all at once or over a set period. Benefits continuation, unemployment insurance, and outplacement services are also common.

Severance pay is often one aspect of a larger severance package employers negotiate with their employees upon their departure. In exchange for severance pay, employers often require employees to sign a general release of claims to deter employees from filing lawsuits against the company.

Here are some scenarios where an employer may offer severance pay: