Microsoft has commenced performance-based layoffs, terminating employees effective immediately without offering severance packages. According to a report by Business Insider, affected staff received notifications stating their employment was ending due to not meeting minimum performance standards.
In the termination letters, Microsoft informed employees: “You are relieved of all job duties effective immediately, and your access to Microsoft systems, accounts, and buildings will be removed effective today.” The company also emphasized the obligation to return company property and protect confidential information post-termination.
These layoffs reflect Microsoft’s intensified focus on performance management, aligning with industry peers adopting stricter evaluation processes. Managers have been assessing employees up to level 80, one of the company’s higher tiers, over recent months.
The company has also begun the process of letting people go across various organizations, including security, experiences and devices, sales, and gaming. However, a spokesperson indicated that these layoffs differ from the performance-based cuts.
Despite the job cuts, Microsoft has reportedly indicated that roles vacated through performance-based exits are often replaced by new hires. The company’s global headcount, estimated at around 228,000 employees as of mid-2024, may remain relatively stable.
The tech industry has witnessed a wave of job cuts, with more than 98,000 employees laid off from over 330 companies globally in the first half of 2024, according to Layoffs.fyi, a platform tracking tech layoffs. More than 98,834 employees have been affected due to job cuts.
Microsoft’s recent actions underscore a broader trend among tech companies to enforce rigorous performance standards amid economic uncertainties and shifting market demands. As the company continues to navigate these challenges, it remains to be seen how these measures will impact its workforce dynamics and overall operational efficiency.