Microsoft layoffs: Were the job cuts handled poorly?

Microsoft's performance-driven layoffs highlight a shift towards stricter accountability in workforce management.
Microsoft has initiated another round of layoffs, citing poor performance as the grounds for termination.
Laidoff workers found their healthcare benefits terminated immediately, and, in some instances, severance was withheld, Business Insider first reported.
The termination letters said employees would be ushered out of their roles without delay, stating:
“The reason(s) for the termination of your employment include that your job performance has not met minimum performance standards and expectations for your position … You are relieved of all job duties effective immediately and your access to Microsoft systems, accounts, and buildings will be removed effective today. You are not to perform any further work on behalf of Microsoft.”
While the letters made no mention of the offer of severance, they made it clear that medical, prescription, and dental benefits would end on the last day of employment.
Microsoft has also signalled that past performance and prior terminations would weigh heavily if employees attempted to return to the company in the future.
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Stricter performance reviews at Microsoft
Microsoft, which currently employs 228,000 full-time staff, has implemented stricter performance reviews, with the company assessing employees up to level 80 – one of the highest echelons within the organisation.
This intensification of evaluation places Microsoft firmly in line with other leading tech firms, all of which are ratcheting up their focus on performance reviews.
The company stresses that it is focused on attracting and retaining top-tier talent while fostering employee growth. However, when performance falls short, the company is quick to take decisive action.
“At Microsoft, we focus on high performance talent,” a spokesperson for the company said. “We are always working on helping people learn and grow. When people are not performing, we take the appropriate action.”
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Microsoft's strategy for job cuts
In addition to these performance-related cuts, Microsoft has also trimmed positions in divisions such as security, experiences and devices, sales, and gaming. According to sources, these reductions are separate from the performance-driven terminations.
Microsoft’s recent job cuts strategy is a glaring example of a wider corporate trend where companies tighten the reins on workforce management to meet changing business demands.
For HR and business leaders, this development calls attention to essential considerations around performance evaluations, the termination process, and employee welfare.
Microsoft’s aggressive stance on performance reviews, for one, indicates a deeper shift towards stricter accountability.
Business leaders keen on refining their workforce strategy should consider implementing robust performance metrics, frequent evaluations, and tailored improvement plans before taking drastic steps like terminations.
A clear and data-driven approach not only ensures fairness but also helps mitigate potential legal headaches.
The immediate revocation of healthcare benefits as part of Microsoft’s termination policy, however, raises red flags in terms of employee experience. For business leaders, this highlights the ethical and reputational risks of such actions.
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Did Microsoft fail to prepare a proper exit plan?
Balancing performance management with support structures such as severance packages, transition assistance, or extended benefits could cushion the impact, preserving morale and the company’s image.
This move could spark similar policies across the tech industry, making it crucial for HR leaders to stay attuned to emerging trends.
Competitive pressures will demand a fine balance between performance-based decisions and employee engagement strategies that nurture talent retention.
While performance-based terminations are sometimes necessary, HR leaders must approach them with fairness, empathy, and foresight to maintain workforce stability and protect the company’s reputation.