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Microsoft is cracking down on low performers by giving them an ultimatum – walk away with 16 weeks of pay or go on a performance improvement plan (PIP).
An internal email from Microsoft’s chief people officer, Amy Coleman, announced that low-performing employees had five days to decide if they wanted to walk away with a severance package or start a PIP.
The same email stated that employees with low performance review scores won’t be eligible for internal transfers, and former employees who left with low scores or following a PIP won’t be considered for rehire until two years after their termination date.
In January, Microsoft implemented performance-based layoffs affecting fewer than 1% of its 228,000 employees. This approach to performance management emerged in the aftermath of CEO Satya Nadella’s 2013 decision to dismantle Microsoft’s “stack ranking” system – a method where managers ranked employees in the same team against each other rather than against individual performance standards.
“A stronger emphasis on individual performance could be a good thing as it can shine light on areas where one might need improvement,” Jared O’Neal, engineering manager at Shipt, says.
Microsoft is the latest tech giant to jump on the industry trend, joining Meta and Amazon in cracking down on low performers for greater efficiency.
In January, Meta cut more than 3,000 employees, calling it “non-regrettable attrition”; in an effort to reduce its workforce by 5%.
Mark Zuckerberg, CEO of Meta, said: “I’ve decided to raise the bar on performance management and move out low-performers faster.
“We typically manage out people who aren’t meeting expectations over the course of a year, but now we’re going to do more extensive performance-based cuts during this cycle.”
And in March 2025, reports indicated that Amazon employees on performance plans have surged in recent years, leading directly to increased layoffs.
Amazon has long employed a performance management system in the “rank and yank” method. Employees are ranked on various metrics, and the lowest performers are systematically laid off from the company.
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A culture of fear
“The biggest contributions to a culture of fear have to do with frequent large scale-layoffs,” Justin Garrison, an ex-Amazon Web Services (AWS) senior developer, says.
According to a survey by business-lending firm Clarify Capital, tech workers in the U.S are more concerned about job security than those in any other industry. The research reveals that one in three American workers is anxious about being laid off in 2025.
London • June 16 & 17, 2025
Speakers Gergely Orosz, Camille Fournier and Lara Hogan confirmed.
Kevin Judge, founder and CEO at Inbol, argues that employees often think company layoffs cut across the board without considering individuals, but that is not always the case.
“Adding more people doesn’t necessarily mean more results, so at a certain point you need to do a little bit of a reset, which sounds like that’s what Amazon, Microsoft, and Meta have done,” says Judge.
While there is considerable noise, the message from industry leaders remains steady: don’t panic. Change and instability are simply part of the industry’s nature.
As O’Neal says, “Job security in tech is always iffy. A lot of folks say if you haven’t been laid off at least once, you’re not a real software engineer.
