Microsoft has instituted a sweeping change in its workforce strategy by imposing a two-year rehire ban on employees who are forced out due to performance-related issues. Internal documents reviewed confirm that this rehire ban is part of a broader organizational shift aimed at tightening performance standards and ensuring long-term workforce efficiency.
Employees who are shown the door for underperformance will now face formal restrictions on returning to the company, a move that ends years of relatively flexible rehire policies. The ban reflects Microsoft’s growing emphasis on long-term productivity and organizational fit, rather than maintaining doors open for potentially reformed former employees.
‘Good Attrition’ Becomes New HR Metric
One of the most notable elements of the new policy is the introduction of a metric termed “good attrition,” which tracks employees whose exits are considered beneficial for the company. Drawing parallels to Amazon’s “unregretted attrition” model, Microsoft’s metric is reportedly being monitored at the executive level, signaling a top-down endorsement of more aggressive attrition strategies.
This internal metric allows leadership to quantify and potentially incentivize the departure of low performers, further institutionalizing a culture of high standards. While Microsoft has not outlined concrete quotas or benchmarks for “good attrition,” its inclusion in executive-level reviews indicates its growing strategic importance.
The shift also mirrors Meta’s “do not rehire” lists, which have long served as an HR mechanism to block underperformers from returning, reinforcing the trend of tech giants hardening their internal policies amid rising market competition and pressure to optimize talent pools.
Performance Management Gets a Tougher Overhaul
In addition to the rehire ban and new attrition metrics, Microsoft has revamped its performance management system in 2024. As part of the overhaul:
-
Around 2,000 employees were let go without severance earlier this year due to underperformance.
-
A new Performance Improvement Plan (PIP) has been introduced, standardized across geographies, with “clear expectations and defined timelines” for improvement.
Employees flagged for poor performance now face two options:
-
Enroll in the new PIP program.
-
Accept a Global Voluntary Separation Agreement (GVSA), which includes a 16-week salary payout.
This binary structure removes previous ambiguity surrounding performance reviews and adds organizational consistency to how underperformance is managed globally.
ALSO READ: FCRF Launches Campus Ambassador Program to Empower India’s Next-Gen Cyber Defenders
A Strategic Pivot Under Competitive Pressures
Microsoft’s policy shift marks a departure from the softer, employee-first culture championed under CEO Satya Nadella, especially during his early years at the helm. The current strategy aligns more closely with aggressive workforce culling trends seen across the tech industry, signaling Microsoft’s intent to compete through operational rigor and performance-based retention.
Analysts see this as a pragmatic shift in the face of macroeconomic pressures and a demanding tech environment where even the most employee-friendly companies are turning toward efficiency-driven management models.
With this pivot, Microsoft is not only reasserting its internal performance benchmarks but also signaling to investors and peers that it is prepared to prioritize results over reputation—even if it comes at the cost of its once-celebrated culture of empathy.