Microsoft imposes 2-year rehire ban for employees terminated due to performance issues

Microsoft is implementing a controversial two-year rehire ban for employees terminated due to performance issues, signaling a major shift in the company's management approach. According to internal documents obtained by Business Insider, the tech giant is also tracking "good attrition" – a metric that counts certain employee departures as positive outcomes for the company.

This policy overhaul comes as Microsoft recently fired approximately 2,000 employees deemed underperformers without severance, part of a broader effort to shed low performers faster and prevent their return to the company.

Performance plans now include exit option

The company's new performance improvement process offers struggling employees two choices: accept a performance improvement plan (PIP) with "clear expectations and a timeline for improvement" or voluntarily leave with a separation package equivalent to 16 weeks of pay, Business Insider reports.

"Employees with zero and 60% Rewards outcomes and/or on an active PIP will not be eligible for internal transfers," stated an internal email to managers from new Chief People Officer Amy Coleman. The email further specified that "former employees who left with zero or 60% Rewards or during/after a PIP will not be eligible for rehire until two years after their termination date."

Microsoft follows industry trend toward stricter management

Microsoft's adoption of these policies mirrors similar approaches at other tech giants. The "good attrition" metric resembles Amazon's controversial "unregretted attrition" system, which sets goals for the percentage of employees organizations should lose annually.

Meta maintains comparable internal block lists that prevent certain former employees from being rehired, using designations like "non-regrettable attrition" and "do not rehire" flags.

Industry analysts see these changes as part of a broader shift across tech companies toward more rigorous performance expectations and reduced employee perks. The era of employee coddling appears to be ending as performance-based job cuts become increasingly common.

Microsoft's new policies represent a significant departure from the company's previous "growth mindset" culture established under CEO Satya Nadella, which had moved away from the controversial stack-ranking system used prior to 2014. The company did not respond to Business Insider's request for comment on the new practices.