Microsoft's big deadline for employees: 'Leave office within five days or...'

Economic Times

28-04-2025

Microsoft is implementing a new performance strategy. The tech giant is offering underperforming employees a severance package of 16 weeks' pay to voluntarily leave instead of entering a Performance Improvement Plan (PIP). Employees have five days to decide, and those choosing the PIP forfeit the payout. Moreover, underperforming employees will also be banned from internal transfers.
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Two-year rehire ban
Tech giant Microsoft has introduced a new set of internal policies to tighten its performance management processes. The company has rolled out a new performance management strategy that gives the option to underperforming employees an option to accept a payout to leave the company instead of entering a performance improvement plan (PIP), Business Insider reported citing internal documents.According to the report, Microsoft is offering 16 weeks of pay to employees, identified as "low performers", who want to leave voluntarily. This approach resembles Amazon's contentious 'Pivot' program, which has been criticized for appearing more focused on meeting termination targets than on supporting employee development.In an internal email sent to managers, the company's new Chief People Officer, Amy Coleman, laid out updated tools and guidelines that are designed to help managers quickly act on underperformance and reward top contributors with greater clarity. The email stated that the company is rolling out "new and enhanced tools to help accelerate high performance and swiftly address low performance."Employees places on PIP are now left with an ugly choice: either accept the improvement plan with its rigorous performance targets or take the severance package and leave. The separation program is being dubbed as "Global Voluntary Separation Agreement (GVSA)" at the company . Those who opt for the PIP will no longer be eligible for the payout, and they have just five days to make their decision, the report said.One of the major updates is a more stringent exit process for employees who consistently receive low performance ratings. Specifically, individuals falling within the 0 to 60 percent reward bracket will no longer be eligible for internal job transfers. Furthermore, employees who leave the company under these circumstances—either voluntarily or through a formal performance improvement plan—will be ineligible for rehire for a period of two years.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.The move is part of a bigger shift seen across the tech industry, where companies have become more focused on productivity and efficiency following years of rapid hiring and expansive perks. Coleman's email highlighted that the goal of these changes is to 'establish a consistent and transparent experience across the globe' while promoting 'a culture centered on accountability and development.' The performance improvement process will now be accessible throughout the year, enabling managers to 'respond swiftly and transparently to performance concerns, while giving employees options.'Earlier this year, Microsoft reportedly laid off around 2,000 employees who were marked as underperformers, without offering severance. The decision followed an extensive internal review process, which included performance assessments even at senior leadership levels.A globally uniform performance improvement process has also been introduced. Managers can now place struggling employees on a structured improvement plan with specific targets and timelines. Those employees will have the option to either work towards improvement or leave voluntarily with a separation offer under a new exit scheme called the Global Voluntary Separation Agreement (GVSA).Although the company has not released an official statement regarding the recent developments, internal communications indicate that Microsoft remains committed to prioritizing performance. Coleman highlighted that the objective goes beyond achieving stronger results—it's also about cultivating a culture where high-performing teams are empowered to thrive and develop.