Accept Payout Or Get Fired: Microsoft's New Offer To 'Low-Performing' Employees

NDTV

24-04-2025

Microsoft is offering its underperforming employees an option to accept a payout to leave the company or risk getting fired while on performance improvement plan (PIP). The move is intended to tighten the company's performance management system as it seeks to release the low-performing workers, according to a report in Business Insider.
The tech giant is offering 16 weeks of pay to employees, identified as "low performers" who are willing to leave voluntarily. The earmarked staffers have five days to decide which option they want to take. If an employee decides to start the PIP, they will be unable to receive the payout.
"This performance improvement process is available year-round so you can act quickly to transparently address performance issues, while offering employees choice," Amy Coleman, Microsoft's new chief people officer, wrote in an email.
The affected employees can enter PIP or quit and accept a "global Voluntary Separation Agreement (GVSA)," the email added.
The new policy also includes a two-year rehire ban for employees who leave after receiving low performance scores or during a PIP. Additionally, underperforming employees will be barred from transferring to other positions within Microsoft.
"Employees with zero and 60 per cent Rewards outcomes and/or on an active PIP will not be eligible for internal transfers. Former employees who left with zero or 60 per cent Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date," the email noted.
Notably, the new PIP system may work differently outside the US, as other countries have different laws.
Microsoft copying Amazon?
The approach by Microsoft has drawn parallels to Amazon's controversial "Pivot" programme, which also offers similar buyout packages. Experts have criticised Amazon's programme for being more focused on meeting termination targets than supporting employee development.
Despite the criticism, the Jeff Bezos-owned company had defended the system, saying it provides managers "with tools to help employees improve their performance and grow in their careers".
"This includes resources for employees who are not meeting expectations and may require additional coaching."
Earlier this year, Meta's Mark Zuckerberg also targeted low performers when the company eliminated thousands of jobs. The fired employees were put on "block lists" to stop them from being rehired.