Microsoft gives underperforming employees a choice: Take 16 weeks' pay and leave, or stay and risk getting fired

Microsoft

Microsoft is changing how it deals with employees who aren’t meeting expectations—and it’s giving them a tough choice.

According to a report by Business Insider, the company is now offering some underperforming employees a payout if they agree to leave voluntarily. They’ll get 16 weeks of pay—but they only have five days to decide. If they choose to stay, they’ll be put on a performance improvement plan, or PIP, which could lead to termination if things don’t improve.

In an internal email, Microsoft’s new Chief People Officer, Amy Coleman, said this is part of a more transparent way to handle performance issues. She called it a system that gives employees a choice. But once someone picks the PIP route, they’re no longer eligible for the payout.

There are other consequences too. Employees who leave during or after the PIP, or who got low performance ratings, won’t be able to return to Microsoft for two years. They also won’t be allowed to switch to other roles within the company.

The move is being compared to Amazon’s “Pivot” program, which also gave employees in similar situations the option to leave with a severance. That program was heavily criticized for focusing more on pushing people out than helping them grow.

Microsoft hasn’t commented publicly yet, but the changes suggest the company wants to be more aggressive about keeping only top performers—something we’ve also seen at companies like Meta. Earlier this year, Meta put thousands of low-performing employees on blocklists so they couldn’t be rehired.

It’s still not clear how this new Microsoft policy will work in countries outside the U.S., where labor laws are different. But one thing’s clear: the message to employees is—perform, or prepare to leave.