Microsoft has officially begun implementing performance-based job cuts, with termination letters detailing the process. The letters, seen by Business Insider, state that employees whose positions are being terminated will lose their healthcare benefits immediately, and in some cases, they will not receive severance pay.
The termination letters, which were provided to Business Insider by sources close to the matter, cite poor job performance as the reason for the layoffs. The letters clearly outline that the employee’s access to company systems and properties, including accounts and buildings, will be revoked immediately. The affected individuals are instructed not to perform any further work on behalf of the company. Additionally, employees are required to return all company assets, including hardware, software, and confidential data.
“The reason(s) for the termination of your employment include your job performance has not met minimum performance standards and expectations for your position,” the letters state, which were shown to Business Insider. Employees who are let go are told that medical, prescription, and dental benefits will end on the final day of their employment.
While severance is not explicitly mentioned in the letters, three former employees told Business Insider that they were informed by Microsoft that they would not be receiving severance pay. These individuals, who wished to remain anonymous, expressed their concerns regarding the immediate termination and loss of healthcare coverage without a severance package.
This move is part of Microsoft’s broader shift toward a more aggressive performance management strategy. As previously reported by Business Insider, the company has been evaluating employee performance across all levels, with some managers assessing performance up to level 80, one of the company’s highest levels. A spokesperson from Microsoft confirmed that when employees are terminated for performance reasons, the company often backfills those roles, meaning that overall headcount may not be significantly affected. Microsoft had roughly 228,000 full-time employees at the end of June.
A Microsoft spokesperson declined to comment further but reiterated the company’s commitment to maintaining a high-performance workforce. “At Microsoft, we focus on high-performance talent,” the spokesperson said. “We are always working on helping people learn and grow. When people are not performing, we take the appropriate action.”
In addition to performance-based job cuts, Microsoft has also recently made other job reductions across its Security, Experiences and Devices, sales, and gaming departments. These cuts, however, were reportedly separate from the performance-related layoffs.
