Microsoft to lay off 4,800 employees globally
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Microsoft is planning a fresh round of mass layoffs that will affect about 4,800 employees worldwide, accounting for around 2.1 per cent of its total workforce, according to reports. The cuts will be concentrated in the company’s sales division and its Xbox gaming arm, which are expected to see the highest number of job losses.
The move is part of a broader business restructuring aimed at cutting costs and reallocating resources towards infrastructure development in the artificial intelligence sector. In the first phase alone, around 1,600 employees in the Xbox division are set to lose their jobs.
For employees in the United States who are being laid off, Microsoft has announced an extensive benefits package. Depending on length of service and seniority, they will receive a minimum of 60 days’ salary, going up to a maximum of 39 weeks of base pay as severance. Staff at level 64 and below will get one week of base pay for every six months of service, while those at levels 65 to 67 will receive two weeks of base pay for every six months worked. A separate package has been designed for employees at level 68 and above.
In addition, eligible employees at level 67 and below will receive stock vesting benefits for a period of six to 12 months, depending on their tenure with the company. They will also be provided with six months of company-backed health insurance, with the option to extend coverage up to 12 months through the COBRA insurance scheme.
The sales division and Xbox gaming unit are expected to bear the brunt of the reductions. In an email to staff, Xbox head Asha Sharma reportedly said the business was currently not profitable. She noted that, compared with rival platforms, Xbox’s profit share was three to ten times lower.
To address the crisis, Microsoft has decided to sell four gaming studios under the Xbox banner and shut down another. Sharma said Xbox would, in the coming years, restructure its content portfolio and platform to focus more on supporting independent game developers. She also emphasised that the layoffs were not a reflection of employees’ talent or commitment.