Microsoft has outlined new policies that could make it easier to fire underperforming employees. An email from Amy Coleman, Microsoft’s Chief People Officer, outlines new policies regarding underperforming employees.
Business Insider obtained and shared the email, which was sent to managers on Friday, April 18, 2025.
If a Microsoft employee is not meeting expectations, managers can use the Performance Improvement Process to create a timeline for improvement. Employees will then be given the option to accept the timeline or leave the company through a Global Voluntary Separation Agreement (GVSA).
The concept of a Performance Improvement Process is common in several industries. The Performance Improvement Process can be used to help an employee increase production or improve the quality of work.
In my experience, many employees placed on a Performance Improvement Plan end up leaving the company shortly afterward. Most begin searching for new jobs almost immediately.
The email notes that employees who score between 0 and 60% on a performance review will be barred from transferring within Microsoft or being rehired for two years after termination. That review system is on a scale from 0 to 200 and affects bonuses and stocks given to employees.
Colemen introduced the policies and guidelines as a way to help "accelerate high performance and swiftly address low performance." The chief people officer explained that the tools "foster a culture of accountability and growth by enabling you to address performance challenges with clarity and empathy."
Microsoft fired 2,000 employees as part of performance-based job cuts earlier this year. The tech giant is also expected to cut more jobs to increase the ratio of coders to non-coders.
“At Microsoft we focus on high-performance talent. We are always working on helping people learn and grow. When people are not performing, we take the appropriate action," said a Microsoft spokesperson following those firings in January 2025.
Microsoft appears to be continuing that approach with its latest tools and performance guidelines.
Business Insider shared the full email from Microsoft:
"Managers,
Thank you for your patience yesterday with the unexpected technical product issues. As customer zero, this was an opportunity to learn and quickly make improvements.
As Satya shared at the recent Employee Town Hall, our success as a company depends on our relevance in year 51 and beyond - in terms of our innovation, the products we deliver, and the impact we have for our customers and partners. With that, our focus remains on enabling high performance to achieve our priorities spanning security, quality, and leading Al. This focus and our growth mindset encourage excellence, motivates us to push ourselves through challenges, and enables us to deliver results.
Today, we're rolling out new and enhanced tools to help you accelerate high performance and swiftly address low performance. Our goal is to create a globally consistent and transparent experience for employees and managers (subject to local laws and consultation). These tools will also help foster a culture of accountability and growth by enabling you to address performance challenges with clarity and empathy.
Manager Readiness: FY25 Performance, Connect and Rewards: Register for a 60-minute virtual, facilitated session to dive deeper into the performance landscape at Microsoft. Each session will explore what's new for FY25 rewards, provide guidance on differentiating rewards outcomes, and define what it means to deliver "significant impact." Next week, you'll also see a mail from Performance and Development to all employees with more details on Connects.
Clarity and Transparency in Rewards: This year, we'll ensure more transparency and clarity in the Rewards process for managers including additional guidance for each rewards outcome and showing payout percentages to help you make decisions that align with our high-performance expectations. More Rewards details will be shared by the end of the month.
Performance Improvement Process: If an employee is not meeting expectations, you can use the Performance Improvement Plan (PIP), a new globally consistent approach to set clear expectations and a timeline for improvement. The employee can accept the improvement plan or choose to transition out of the company with the offer of a Global Voluntary Separation Agreement (GVSA). This performance improvement process is available year-round so you can act quickly to transparently address performance issues, while offering employees choice.
Updated Internal Movement/External Rehire Policy: Employees with zero and 60% Rewards outcomes and/or on an active PIP will not be eligible for internal transfers. Former employees who left with zero or 60% Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date.
Manager Excellence Initiatives: Additionally, in the coming months, we'll launch several initiatives to strengthen how we measures manage, and motivate teams to deliver for our customers. You'll have access to scenario-based, Al-supported tools designed to help you prepare for constructive or challenging conversations by practicing in an interactive environment.
Thank you for your leadership and commitment to driving high performance and accountability across your team. 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."
