Microsoft has introduced a significant policy change affecting former employees who were let go due to performance issues. The company is now enforcing a two-year ban on rehiring such individuals, categorizing these workforce reductions as “good attrition.” This move aligns with the broader trend in the tech industry as companies strive to establish a more streamlined workforce following the pandemic-induced hiring surge.
During the pandemic, numerous tech companies, including Microsoft, expanded their workforce substantially. However, this rapid growth led to personnel redundancy and the inclusion of underperforming employees. As the industry adjusts to the post-pandemic landscape, many companies have resorted to mass layoffs to enhance operational efficiency.
According to a report by Business Insider, Microsoft’s rehire ban represents a more stringent measure than typical layoffs. The company had previously terminated approximately 2,000 employees earlier this year due to underperformance, with these former staff members receiving no severance packages. Microsoft’s characterization of these departures as “good attrition” reflects a strategic approach to workforce management.
The concept of attrition is commonly used by companies to naturally reduce their headcount without implementing large-scale layoffs. For instance, in mid-2022, Amazon utilized “unregretted attrition” to decrease its workforce by 100,000 in anticipation of an economic downturn. Interestingly, later reports revealed that Amazon’s “regretted attrition” – the loss of valued employees – was incurring an estimated annual cost of $8 billion.
Microsoft’s decision to implement a rehire ban on underperforming former employees underscores the company’s commitment to refining its workforce composition in the post-pandemic era. This policy, while controversial, is part of a broader industry trend aimed at achieving greater operational efficiency and aligning workforce capabilities with current business needs.
