Microsoft Tightens Workforce Management with New Rehire Ban
Microsoft has implemented a two-year rehire ban for employees who were let go due to performance issues, marking a significant shift in the company’s approach to workforce management. According to internal documents reviewed by Business Insider, the tech giant is categorizing these departures as “good attrition,” essentially labeling certain employee exits as beneficial for the company.
This policy change indicates that Microsoft is deliberately tightening its internal standards by implementing formal mechanisms to prevent the return of employees whose performance didn’t meet expectations. Historically, the company had approached such situations with more flexibility. The newly introduced “good attrition” metric, similar to Amazon’s controversial “unregretted attrition” approach, allows Microsoft to track and even celebrate the departure of employees it’s happy to see leave.
Revamped Performance Management System
Microsoft is fundamentally restructuring its approach to performance management. Earlier this year, the company terminated 2,000 employees deemed underperformers without severance and introduced a new performance improvement plan (PIP) with globally consistent standards featuring clear expectations and a timeline for improvement. Employees facing performance issues now face a stark choice: enter the company’s PIP program or accept a “Global Voluntary Separation Agreement” that includes a payout equal to 16 weeks of salary.
These changes mark a significant departure from Microsoft’s previous management philosophy under CEO Satya Nadella, suggesting the company is moving away from its more employee-friendly reputation as it intensifies its focus on efficiency and high-performance metrics. This shift aligns Microsoft with its industry peers, such as Amazon and Meta, which have implemented similar strategies to manage underperforming employees.
The new policies reflect Microsoft’s efforts to enhance its workforce management by more aggressively managing out underperformers while preventing their return to the company. This approach is expected to have a significant impact on the company’s work culture and employee expectations in the future.
