Microsoft cuts 4,800 jobs, offers generous severance

Microsoft announced a significant reduction of its global workforce this week, eliminating approximately 4,800 positions, which represents about 2.1 percent of its total employees. The layoffs are part of a broader restructuring focused on the company's Xbox gaming division and sales teams, driven by a strategic shift to invest heavily in artificial intelligence infrastructure.

The cuts are heavily concentrated within the Xbox unit, where about 3,200 jobs are expected to be eliminated during the current financial year. An internal memo from Xbox leadership described the move as the largest restructuring in the platform's history, citing challenges from tighter profit margins, rising costs, and stalling growth in the hardware sector. The memo acknowledged the difficulty of the decision, stating that it did not reflect the talent or dedication of the affected employees.

Impacted employees have been notified and will receive a comprehensive severance package. For U.S. workers, the package includes a minimum of 60 days of base pay while they remain on the company's payroll. Beyond that, severance pay is calculated based on an employee's internal level and tenure. Employees at level...