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Microsoft is giving underperforming staff an option to either resign with a financial package or face the risk of termination after entering a performance improvement plan (PIP).
According to Business Insider, this step is part of the company’s effort to streamline performance management and phase out employees who fail to meet expectations.
Employees Get 5 Days to Choose Between Resignation or PIP
Identified as “low performers,” the affected employees have been offered a 16-week salary payout under a “Voluntary Separation Agreement” (GVSA). However, they have only five days to make their decision. If they opt to proceed with the PIP, they will forfeit the payout entirely.
Amy Coleman, Microsoft’s recently appointed Chief People Officer, confirmed the new measures via internal email. “This performance improvement process is available year-round so you can act quickly to transparently address performance issues, while offering employees choice,” she wrote.
Two-Year Ban on Rehiring and Internal Transfers
Employees with poor performance ratings (zero or 60% Rewards outcomes) and those currently on PIP will be ineligible for internal transfers. Furthermore, any employee who departs under these conditions will face a two-year rehire restriction.
“Former employees who left with zero or 60 per cent Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date,” the internal message noted.
While this policy is being implemented across Microsoft, its execution may differ internationally due to varying labor laws in different countries.
Microsoft’s Move Compared to Amazon’s “Pivot” Program
Microsoft’s latest step is drawing comparisons with Amazon’s much-debated “Pivot” program, which also offered employees the choice to resign with benefits or face a performance-based termination path. Critics argue that such programs are more about meeting termination quotas than genuinely assisting employees to improve.
However, Amazon defended its initiative, stating, “It provides managers with tools to help employees improve their performance and grow in their careers,” adding that it includes coaching resources for struggling workers.
Earlier in 2025, Meta CEO Mark Zuckerberg implemented a similar performance-focused strategy, which resulted in mass layoffs. Those let go were placed on “block lists” to prevent them from being rehired at the company.
