Microsoft has started performance-based layoffs, which result in instant termination and no severance pay for impacted workers.
The company’s more strict approach to talent management as it looks to preserve its competitive edge is highlighted by the action, which was first reported by Business Insider.
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.
The letter also called for the prompt return of all corporate property, including phone cards, company cards, and card keys. Additionally, the letter warned that any subsequent applications for jobs at Microsoft would be assessed based on prior performance and the grounds for termination.
At Microsoft, the performance-based exits are a component of a larger pattern. In an attempt to give priority to high-performing personnel, managers have been conducting thorough evaluations of all employees, even those at the highest levels (level 80), in recent months.
According to insiders, positions left empty by performance-based layoffs are frequently filled by new hires, despite the immediate effects on those leaving. This tactic could maintain a relatively constant global workforce for Microsoft, which is expected to have about 228,000 people as of mid-2024.
Microsoft has a history of large layoffs, which is followed by this most recent round of performance-based terminations. The business has reorganized its personnel numerous times since Satya Nadella was appointed in 2014. This includes a significant layoff of about 18,000 workers that year, another round of 10,000 layoffs in 2023, and targeted reductions in its gaming and Mixed Reality divisions in subsequent years.
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