In a radical and provocative step, Microsoft has instituted a new series of internal policies that significantly strengthen the way it handles underperforming employees, and prevents their return for years. Based on internal documents shared with Business Insider, the technology giant is now imposing a two-year rehire prohibition for employees who are let go because of subpar performance. The radical move represents a clear departure from the more supportive “growth mindset” culture
Microsoft had earlier developed under CEO Satya Nadella.
However, changes do not end here.
Microsoft is also said to be monitoring a new metric, referred to as “good attrition”, a term that basically rebranded some employee departures as a boon to the organization. This is comparable to other tech giants’ similar moves, such as Amazon’s “unregretted attrition” model, and indicates a developing industry trend of more ruthless performance management.
The New Rules: Shape Up or Ship Out
As part of the revamped performance improvement process in the company, troubled employees now have two stark choices:
- Sign a Performance Improvement Plan (PIP) with clear goals and a tight timeline to show improvement, or
- Take a voluntary departure with a severance package, which is reportedly worth 16 weeks of pay.
- It’s an unmistakable message: shape up quickly or take the cash and go.
But the ramifications go even wider. In an internal memo that Microsoft’s new Chief People Officer, Amy Coleman, distributed, it was explained that staff members who had subpar performance ratings, either “zero” or “60% Rewards,” or were already on a PIP would not be allowed to take internal transfers.
In addition, anyone who leaves during or following a PIP, or with one of those subpar performance ratings, cannot reapply to the company for at least two years.
That covers employees fired in the latest round of reductions, where some 2,000 individuals were discharged without severance, according to reports all of whom were categorized as underperformers.
From Growth Mindset to Metrics-Driven Culture
They represent a definite departure, or some would argue regression, from the culture CEO Satya Nadella preached when he became leader in 2014. Nadella then distanced the organization from the notorious “stack ranking” system that had promoted internal competition and bitterness.
Under Nadella, Microsoft started to emphasize a “growth mindset,” learning, collaboration, and empathy. But the recent change appears to indicate the return of hard numbers, easy judgments, and less patience for employees who cannot keep pace.
The addition of “good attrition” once again brings Microsoft in line with Amazon and Meta, firms already keeping internal “do not rehire” rosters for departing workers who parted ways on less-than-perfect terms. At Meta, managers use terms like “non-regrettable attrition” to label exits as a good thing.
Industry-Wide Wake-Up Call
Technology firms have long been competitive, but the past few years, with their mass firings, dwindling perks, and economic insecurity, have hastened a wider trend toward performance-based management. The indulgence of extended ramp-up times, plush severance deals, and job security appears to be disappearing quickly.
This, analysts consider, is not merely a Microsoft problem, but a harbinger of a change of tide all across Silicon Valley. With greater needs for innovation, and narrowning margins, business seems to value productivity at the expense of employees.
Nevertheless, the pushback is growing. Critics contend that such policies might harm morale, stifle risk-taking, and harm diversity and inclusion initiatives. Others are concerned about what this portends for an industry that once bragged about second chances, mentorship, and people-first leadership.
Microsoft Refuses to Comment
When asked for comment on the new policies and internal memos, Microsoft refused to make any public comments. Silence is golden, and the message to employees is already boisterously clear.
Shape up, or step out. And if you do depart? Don’t be expecting to come back, for at least two years.