Microsoft Layoffs 2025: Severance Rights & Employee Guide

What’s Happening at Microsoft?

In 2025, Microsoft has eliminated more than 15,000 jobs worldwide, making this the company’s largest year of cuts since 2023 (Reuters):

• May 2025 – 6,000 layoffs (~3% of workforce)
• July 2025 – 9,000 layoffs (~4% of workforce)

Entire divisions and projects were impacted:

• 🎮 Gaming: Xbox, ZeniMax, King (Candy Crush), Turn 10 Studios, Initiative game studio
• 🚫 Cancelled Projects: Perfect Dark and Everwild
• 🏢 Sales & Marketing: Traditional sales phased out in favour of “solutions engineers”
• 🧑‍💻 Mixed Reality & Support: Significant reductions

Shift From Sales

Alongside these cuts, Microsoft is also restructuring its global sales operations. Microsoft is consolidating six sales solution areas into three and replacing many traditional sales roles with more technica “solutions engineer” positions (Microsoft). The company says this shift will reduce management complexity and align its teams with Microsoft’s growing focus on AI and cloud services.

Nadella’s Notes

CEO Satya Nadella acknowledged the “emotional weight” of the Microsoft layoffs on the company’s official blog, calling them an “enigma of success” — highlighting the paradox of record profits alongside mass layoffs.

Despite reporting $70B+ in revenue and $26B in profit this quarter (Yahoo News), Microsoft is cutting back to refocus on AI and cloud services.

Discussions on Reddit show growing concern about repeated layoffs and challenges finding new roles.

Microsoft Layoffs in Canada

Microsoft employs over 5,300 people in Canada, headquartered in Toronto with operations nationwide.

Canadian roles have been impacted — though Microsoft hasn’t disclosed figures. BNN Bloomberg confirmed Canadian layoffs, and Samfiru Tumarkin LLP’s layoff tracker shows employees across Toronto, Vancouver, and other hubs already reaching out for help.

• Layoff notices with lowball severance offers
• Buyout or exit packages that don’t reflect your rights
• Reassignment or demotions that may qualify as constructive dismissal

Microsoft Severance Pay – What Employees Should Know

If you’re a non-unionized Microsoft employee in Canada, you may be entitled to up to 24 months’ pay as severance in Canada when you are let go.

How Severance is Calculated

Several factors determine what you’re owed, including:

• Age
• Length of service
• Position or seniority
• Ability to find similar work (job market conditions)

What a Fair Package Should Include

A proper and fair severance package at Microsoft must cover:

• Salary
• Bonuses & commissions
• Benefits & pension contributions
• RSUs, stock options, incentive pay
• Vacation pay & allowances

Not Always Called a Layoff

Sometimes Microsoft (and other large employers) avoid calling it a layoff by cutting pay, reducing responsibilities, or reassigning employees. In Canada, these changes may qualify as constructive dismissal — which is legally treated the same as a termination and may entitle you to full severance pay.

Case Spotlight: Battiston v. Microsoft Canada

In Battiston v. Microsoft Canada Inc. (2020 ONSC 4286), the court ruled Microsoft’s attempt to limit share awards for a Microsoft executive was invalid.

• Client secured 24 months’ notice
• Bonuses and share compensation continued
• Microsoft was ordered to pay $120,000 in legal fees

Severance Success Stories – Our Track Record

We’ve negotiated significant results for employees at major corporations, including:

• ✅ 24 months’ severance for a long-term professional after refusing unfair new terms post-acquisition. See our win →
• ✅ 6 months’ severance for a short-term executive pressured to sign an unfair release after termination. See our win →
• ✅ 4 months’ severance for an employee terminated after just eight months in a senior role. See our win →

Our clients are often surprised by how much they’re legally owed after being wrongfully dismissed — and legal fees are often covered by the employer.

FAQs on Microsoft Layoffs

Speak to an Employment Lawyer About Microsoft Layoffs

If you’ve been impacted by Microsoft layoffs in Canada, don’t sign anything before seeking legal advice.

At Samfiru Tumarkin LLP, we:

• 👥 Represented 50,000+ Canadians
• 💰 Secured millions in severance payouts
• ⚖️ Settle over 99% of cases out of court
• ⭐ Earned 3,000+ 5-star Google reviews
• 🏆 Named one of Canada’s Best Law Firms

📞 Call us at 1-855-821-5900 or request a consultation online.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and should not be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.