Microsoft announced on Monday that it will lay off around 4,800 employees — about 2% of its global workforce — as part of a cost-cutting drive that includes a major restructuring of its Xbox gaming division.

Microsoft layoffs: Here is the severance package being offered to laid-off employees. (REUTERS)

This is the latest in a wave of tech layoffs spurred by the rise of artificial intelligence, with companies facing pressure to show returns from the technology and offset the rising cost of rolling it out across their businesses. Amazon and Meta Platforms have also laid off thousands of employees this year.

The package includes a minimum of 60 days' base pay, during which affected employees will remain on the company's payroll. Beyond that, most employees will receive additional severance based on their tenure and seniority, with the total payout capped at 39 weeks' base salary.

(Also read: Laid-off Xbox engineer says he poured 'heart and soul' into company for over 20 years)

Employees at internal levels 64 and below will receive one week's base pay for every six months of service, while those at levels 65 to 67 will receive two weeks' base pay for every six months of service.

Executives at level 68 and above are covered under a separate severance plan.

The company is also offering continued stock vesting for employees at level 67 and below for six or 12 months, depending on their length of service. In addition, affected employees will receive six months of paid health insurance coverage, along with the option to extend their coverage through COBRA for up to 12 more months.

The software giant earlier this year offered voluntary buyouts to about 7% of its U.S. workforce, or about 9,000 employees. Microsoft often trims jobs near the end of its fiscal year in June as it sets spending plans for the new year.

Booming AI demand has powered growth at Microsoft's Azure cloud-computing business, which was the exclusive seller of OpenAI's models until April, but the mounting cost of building data centers to run those services is squeezing its cash flows.

The company, expected to report results later this month, had in April forecast quarterly Azure sales above Wall Street estimates, but also issued a $190 billion spending projection for 2026 that massively surpassed expectations.

(With inputs from Reuters)