Microsoft shocking ultimatum to employees, accept payout or..., HR gives 5 day deadline to choose between...

India.com

25-04-2025

Microsoft has made big changes to how it handles employee performance. As per a report by Business Insider , the company has introduced a new system that gives underperforming employees a choice: they can either join a strict performance improvement program (PIP) or take a payout and leave the company. Instead of entering a tough performance plan, employees marked as 'low performers' now have the option to leave voluntarily and receive 16 weeks of pay. This new policy is similar to Amazon's controversial 'Pivot' program, which has faced criticism for focusing more on pushing people out rather than helping them improve.
Amy Coleman, Microsoft's new Chief People Officer, sent an internal email to managers explaining the updated rules. These include fresh tools aimed at quickly rewarding high achievers and dealing with poor performance more effectively. The message emphasized faster action on performance issues and clearer rewards for top employees.
Employees placed under the performance plan now face a tough decision. They have only five days to choose between accepting the plan—with c—or taking the severance package. This exit option is officially called the 'Global Voluntary Separation Agreement (GVSA).' Once someone agrees to the PIP, they can no longer opt for the payout.
In another major change, employees who consistently fall into the lower 60% performance group will not be allowed to apply for internal job moves. Also, anyone who leaves the company under this program—whether voluntarily or through performance dismissal—won't be eligible to return to Microsoft for the next two years. What are the key changes?
One of the key changes includes a two-year ban on rehiring employees who either leave the company after receiving low performance ratings or exit during a Performance Improvement Plan (PIP). These employees will also no longer be allowed to move to different roles within the company.
The update is part of a broader shift in the tech world, where companies are becoming more focused on output and trimming down after years of aggressive hiring and generous benefits. Microsoft's Chief People Officer, Amy Coleman, mentioned in an internal email that the goal is to build a more consistent, transparent approach globally while creating a workplace culture rooted in responsibility and professional growth.
The new performance process is no longer limited to annual cycles—it will now be available year-round, giving managers more flexibility to address performance issues quickly and clearly. Under the new system, employees who are not meeting expectations will be given a clear set of goals and timelines. If they don't wish to go through the improvement process, they can opt for a voluntary exit with a payout, under the company's Global Voluntary Separation Agreement (GVSA).
Earlier in the year, Microsoft reportedly let go of nearly 2,000 employees labeled as low performers. Unlike the current plan, those layoffs didn't include a severance offer. This followed an extensive internal performance review, which even looked at leadership roles.
Although Microsoft hasn't released a public statement about the changes, internal messages make it clear that the company is committed to boosting team performance while supporting employees who show strong potential. The aim, Coleman noted, is not just better results—but also to nurture an environment where top performers can grow and succeed.