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Microsoft is rolling out a new set of performance management measures aimed at swiftly addressing low performers across its global workforce, according to an internal email from new Chief People Officer Amy Coleman.
The tech giant, which has already made headlines this year with the dismissal of 2,000 underperforming employees without severance, is now introducing tougher internal movement restrictions and a two-year rehire ban for employees who fail to meet expectations.
In her message to managers, Coleman said the updated approach is designed to support not only Microsoft's corporate success but also individual and team achievements. Managers were told the changes align with the company’s wider focus on innovation, security, quality, and leadership in artificial intelligence as it heads into its next phase of growth.
Internal email details Microsoft's updated approach
Under the new framework, Microsoft has launched "new and enhanced tools" to accelerate high performance and address performance concerns consistently worldwide. Manages will be offered a 60-minute virtual session to provide guidance and "define what it means to deliver 'significant impact'."
One of the major updates is the introduction of a globally standardised Performance Improvement Plan (PIP), which will offer employees clear expectations and a timeline for improvement. Staff who do not wish to participate in a PIP will have the option of accepting a voluntary separation agreement.
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The firm is also introducing a ban on internal transfers for employees who have received a zero or 60% performance reward outcome or who are on an active PIP. In addition, former employees who left the company with low performance scores or after a PIP will not be eligible for rehire until two years after their termination date.
Coleman told managers: “This isn't just about Microsoft's success. This is about your success, your team's success, our customers' success, and together, fostering a culture where high-performing, winning teams can thrive.”
Microsoft plans AI tools to support management conversations
Beyond the policy updates, Microsoft is planning to deploy AI-supported tools to help managers prepare for challenging performance discussions. Interactive resources will be available to equip managers with the ability to conduct more constructive conversations around performance and development.
The company is also increasing transparency around its rewards system, providing additional guidance for performance evaluations and sharing payout percentages to ensure managers' decisions align with Microsoft's high-performance expectations.
The initiatives reflect a broader trend in the tech sector, where companies are shifting away from perk-heavy workplace cultures in favour of more accountability-driven models. Microsoft’s sharper focus on managing low performers highlights a growing movement among major employers to reinforce performance standards amid economic uncertainty and rapid technological change.
Although many will see the changes as extreme, Microsoft is looking to maintain a competitive edge by ensuring its workforce is aligned with its evolving business priorities, a move HR leaders across industries will be watching closely.
