Microsoft implements instant layoffs with no severance for departing staff
Tech giant’s new performance management policy results in swift terminations without severance, as it tightens standards amid a competitive tech landscape.
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Microsoft has initiated performance-based job cuts that leave affected employees without any severance pay and with immediate termination.
The action, first reported by Business Insider, underscores the company's increasingly stringent approach to talent management as it seeks to maintain its competitive edge.
A letter sent to the impacted employees by Microsoft (via Business Insider) read, "The reason(s) for the termination of your employment including your job performance has not met minimum performance standards and expectations for your position. You are relieved of all job duties effective immediately and your access to Microsoft systems, accounts, and buildings will be removed effective today. You are not to perform any further work on behalf of Microsoft.”
“You are bound by the terms of your Microsoft Employee Agreement to return such materials and to protect Microsoft confidential information after termination of your employment.” the email added.
In addition, the letter demanded the immediate return of all company property, including card keys, company cards, and phone cards. The correspondence also cautioned that any future applications for employment at Microsoft would be evaluated in light of past performance and the reasons behind the dismissal.
The performance-based exits are part of a broader trend at Microsoft. Over recent months, managers have been rigorously evaluating employees—even those at the highest levels (up to level 80)—in an effort to prioritize high=performing talent.
Despite the immediate impact on those exiting, insiders suggest that roles vacated by performance-based cuts are often replaced by new hires, a strategy that could keep Microsoft’s global headcount—estimated at around 228,000 employees as of mid-2024—largely stable.
This latest round of performance-based terminations follows a history of significant layoffs at Microsoft. Since Satya Nadella’s appointment in 2014, the company has repeatedly restructured its workforce, including a major cut of approximately 18,000 employees that year, another round of 10,000 layoffs in 2023, and targeted reductions in its gaming and Mixed Reality organizations in recent years.
