The Microsoft Severance Package, and What Yours Might Be Worth
Estimate your own number from the reported 2026 formula — level-based weeks, the 60-day minimum and the 39-week cap. Reported terms, not guaranteed: verify against your own separation agreement. For what the package actually contains — stock vesting, health coverage, WARN filings and the layoff timeline — read the Microsoft layoffs and severance guide.
Estimate my Microsoft severanceLooking for the full picture — layoff timeline, WARN, benefits and next steps? See the Microsoft layoffs guide.
Key takeaways (reported terms)
- Reported 60-day minimum of base pay
- Up to 39 weeks cash severance for most U.S. employees
- Level 64 and below: reported 1 week per 6 months of service
- Level 65–67: reported 2 weeks per 6 months of service
- Level 68+ / executives: separate, individually negotiated plan
- Reported continued stock vesting and 6 months of paid health coverage
Reported figures (Business Insider, July 2026), not guaranteed. Confirm against your own separation agreement.
What happened — July 2026
The headcount, precisely
- On July 6, 2026, approximately 4,800 Microsoft roles were announced for elimination globally — about 2.1% of the workforce.
- Approximately 1,600 of those immediate cuts were Xbox roles.
- Reporting separately indicated that approximately 3,200 Xbox reductions in total were expected through fiscal year 2027.
- The 3,200 figure is therefore not the number of Xbox employees laid off on July 6, 2026 — that number was about 1,600.
The reported severance terms
Reported U.S. terms include a minimum of 60 days of base pay, with total cash severance reportedly capped at up to 39 weeks (about nine months) for most employees, depending on level and tenure. Reported terms also add 6 or 12 months of continued stock vesting for level 67 and below depending on tenure, and 6 months of paid health insurance followed by optional COBRA coverage — confirm your exact coverage end date with HR.
Each figure above is sourced individually in the sources and verification block below, with its publication date. These are reported terms for affected U.S. employees — not guaranteed policy.
Reported terms — individual packages vary by role, level, and agreement. Always confirm against your own separation agreement. Nothing here is guaranteed.
Microsoft severance calculator
Enter your base salary, level, and tenure to estimate cash severance under the reported level formula. It applies the reported 60-day minimum and 39-week cap.
Microsoft Severance Mini-Calculator
Based on reported terms (Business Insider, July 2026). Runs entirely in your browser — nothing you type is uploaded or stored.
Private by design — this calculator never sends your inputs anywhere.
Enter your base salary and years at Microsoft to see an estimate based on the reported level formula.
Reported terms, Business Insider, July 2026. Individual packages vary by role, level, and agreement — always confirm against your own offer letter. Educational estimate, not legal or financial advice.
This is an educational estimate based on reported terms (Business Insider, July 2026) — not legal, tax, financial, or employment advice, and not a promise of any amount. Your actual package depends on your role, level, tenure, and agreement. Confirm against your own separation agreement.
Methodology and assumptions
How the calculator works
- Weekly base pay = annual base salary ÷ 52.
- Level 64 and below: reported 1 week of base pay per 6 months of service.
- Level 65–67: reported 2 weeks of base pay per 6 months of service.
- Level 68+ / executive: no formula is shown — these packages are individually negotiated.
- Reported 60-day minimum (~8.6 weeks) is applied as a floor when the level formula is lower.
- Total is capped at the reported 39 weeks; the calculator flags when the cap binds.
- The salary field accepts shorthand such as “150k”.
What it does and doesn't include
- The dollar figure is gross cash base pay only, before taxes.
- It does not include continued stock vesting, paid health coverage, PTO, or bonus — value those separately.
- Runs entirely in your browser; nothing you enter is uploaded or stored.
Limitations
- Figures reflect reported terms (Business Insider, July 2026), not a guarantee of what you'll receive.
- Packages vary by role, level, location, tenure, and agreement, and companies change terms between rounds.
- Educational estimate only — confirm against your own separation agreement and consult qualified professionals.
Is this a good package? How to judge it
The useful comparison is not against other companies' headline numbers, which are usually undated, partial, and drawn from different rounds and roles. It is against your own tenure, level and costs.
- Convert it to weeks per year of service and compare it with the directional benchmark on the severance pay calculator — which is explicit that its range is a LayoffNext planning assumption, not a market average.
- Value the non-cash items separately. Continued vesting and 6 months of paid coverage can be worth more than a few extra weeks of base pay, and neither appears in the cash figure.
- Convert it to months of runway with the layoff runway calculator. That number decides your job-search timeline; the headline number does not.
LayoffNext previously showed a table of other companies' reported severance terms here. It was removed on August 25, 2026 because the figures could not be individually sourced and dated, and an undated cross-company comparison is not information gain.
What to do this week
A short, ordered plan to protect your money and options while the details are fresh.
Don't sign immediately
If you're 40 or older and the agreement includes an ADEA waiver, federal OWBPA rules generally require at least 21 days to consider an individual waiver, 45 days for a group termination program, and at least 7 days to revoke after signing. Signing usually releases legal claims.
Should I sign? checklistRun your package through the calculator
Value the full offer — cash, PTO, bonus, and equity — and get a strength rating plus HR questions before you sign.
Severance Pay CalculatorFile for unemployment early
Severance doesn't automatically disqualify you. Estimate your benefit and file as soon as your state allows.
Unemployment Benefits EstimatorCompare COBRA vs Marketplace
Before Microsoft's paid coverage ends, compare keeping your plan through COBRA against an ACA Marketplace plan.
COBRA vs Marketplace CalculatorCalculate your runway
Convert your severance and savings into months of expenses covered so you can plan your job search.
Layoff Runway CalculatorCheck the first 24-hours checklist
A calm, step-by-step plan for what to secure and confirm right after a layoff.
Laid off today checklistOn a work visa at Microsoft? Your timeline is different — and it depends on your classification.
If you hold an employment-based nonimmigrant status, a layoff starts a strict clock. Under 8 CFR 214.1(l)(2) the grace period is generally up to 60 consecutive days or until the end of your authorized validity period, whichever is shorter, once during each authorized validity period. It runs from cessation of the employment on which your status was based.
Do not determine the immigration grace-period start date solely from whether Microsoft pays you through salary continuation or a lump sum. The regulation is tied to the cessation of the employment on which the status was based, not to the payment method. Ask Microsoft or HR to confirm the official employment cessation/termination date in writing — separately from your final working day and from the end date of any severance payments — and verify the immigration consequence with qualified counsel.
What you can do inside that window is not the same for every visa.The word “transfer” comes from H-1B, and it does not describe how the other classifications work:
- H-1B — a statutory portability provision can let you begin work for a new employer once a non-frivolous petition is filed. See H-1B transfer after a layoff.
- L-1 — no portability, and it depends on a qualifying corporate relationship, so an unrelated employer generally cannot sponsor you at all. See L-1 visa layoff.
- O-1 — no cap and no lottery, but no portability either: a new petition generally has to be approved before you work. See O-1 visa layoff.
- TN — employment with a different employer is not authorized prior to Department approval, and the route differs for Canadian and Mexican citizens. See TN visa layoff.
Across all of them the alternatives to a new petition are the same: a change of status, or departure before the window closes. Map the dates early rather than under pressure later.
Educational only, not legal advice. Immigration outcomes are individual and time-sensitive — confirm your situation with a qualified immigration attorney.
Frequently Asked Questions
How much severance is Microsoft offering in the 2026 layoffs?+
How is Microsoft severance calculated by level?+
Do laid-off Microsoft employees keep vesting stock?+
What health coverage do laid-off Microsoft employees get?+
Can I get unemployment if I receive Microsoft severance?+
What happens to visa holders laid off by Microsoft?+
Is Microsoft's severance package negotiable?+
Is this information guaranteed to apply to me?+
Related tools and guides
Why trust this calculator?
- Designed by Deepak Middha, a Chartered Accountant and finance educator
- Built using publicly available guidance and documented assumptions
- An educational planning tool — not personalized financial or legal advice
- Reviewed and updated regularly
- Privacy friendly — inputs stay in your browser
- Methodology is published and open to read
- Known limitations are documented, not hidden
Important Disclaimer
This page is educational and reflects reported terms and general benchmarks — not legal, tax, financial, immigration, or employment advice, and not a promise of any amount. The reported Microsoft figures are attributed to Business Insider, July 2026 and may not match your role, level, location, tenure, or agreement. Companies change severance terms between rounds. Always confirm against your own offer letter and separation agreement, and consult qualified professionals — an employment attorney, tax professional, or immigration attorney — for guidance specific to your situation.
Sources and verification
Company severance terms are reported, not published policy. Each figure on this page maps to a row below, with the date it was published and the date LayoffNext last checked it.
| Source | Published | What it supports | Last checked |
|---|---|---|---|
| The latest in our company transformationMicrosoft — The Official Microsoft Blog (Amy Coleman, EVP and Chief People Officer) | 2026-07-06 | Microsoft's own account of the round: “around 4,800 roles, about 2.1% of our global workforce”, with the changes “mostly fall[ing] within our Commercial and XBOX organizations”. This is the primary source for the 4,800 and the 2.1%; Microsoft published no divisional split, so the Xbox figures below are reported rather than company-stated. | 2026-08-26 |
| Microsoft cuts 4,800 jobs, about 2% globally, revamps salesforce and launches massive Xbox overhaulGeekWire | 2026-07-06 | That about 1,600 of the 4,800 were Xbox roles, and that further gaming cuts were expected to bring the division's reductions to roughly 3,200 — about 20% of the global Xbox workforce — across the fiscal year. Also the source for the 600 Washington-state cuts and for the voluntary retirement take-up (about 30% of roughly 8,750 eligible US employees), which reduced the size of the involuntary round. | 2026-08-26 |
| Microsoft lays off nearly 5,000 employees across Xbox, commercial salesTechCrunch | 2026-07-06 | That approximately 4,800 roles (about 2.1% of the global workforce) were announced for elimination on July 6, 2026; that approximately 1,600 Xbox roles were cut in that immediate action; and that approximately 3,200 total Xbox reductions were expected through fiscal year 2027. | 2026-08-26 |
| Microsoft layoffs: Here's what impacted employees will get in severanceBusiness Today (reporting on Business Insider's account of internal materials) | 2026-07-09 | The reported U.S. severance terms: a minimum of 60 days of base pay on payroll, up to 39 weeks of base pay, the level-based formula (1 week per 6 months at level 64 and below, 2 weeks per 6 months at levels 65–67, a separate arrangement at level 68+), continued stock vesting of 6 or 12 months for level 67 and below, and 6 months of company-paid health insurance with an option to extend via COBRA. | 2026-08-26 |
| Business Insider's reporting on Microsoft's July 2026 severance termsBusiness Insider | 2026-07-08 | The original reporting the severance figures above are attributed to. LayoffNext has not been able to verify a durable direct link to the underlying article, so the terms are cited here through the dated secondary report above rather than presented as independently confirmed. | 2026-08-26 |
Facts last verified August 26, 2026. Reported terms are not guarantees — confirm everything against your own separation agreement.
Primary sources for the general guidance
Federal labor, WARN and immigration sources for the non-company-specific guidance on this page, including the 8 CFR 214.1(l)(2) grace period referenced in the visa section.
Deepak Middha is the founder of LayoffNext and a Chartered Accountant (ICAI, India). A U.S. immigrant with nearly 20 years of experience — and 17 years in hedge fund and private equity administration, including as Vice President of Fund Accounting at NAV Fund Administration Group and Associate Director of Private Equity and Real Estate at SS&C Technologies — he builds free, plain-language layoff tools and guides for employees, H-1B workers, and immigrant families.
Last updated August 26, 2026.