Microsoft To Underperformers: Take 16 Weeks’ Pay Or Enter Performance Review; Details Here

Those who decline the payout will be placed on a PIP, which is widely regarded as a precursor to termination. Once on a PIP, employees forfeit the option of receiving the 16-week severance

The initiative is part of Microsoft’s continued efforts to restructure its operations and increase efficiency

Source : Microsoft

Microsoft is offering financial incentives to employees labeled as underperformers, as part of a broader workforce restructuring initiative following major layoffs announced earlier in May. According to a report by Business Insider, the tech giant has rolled out a voluntary exit program that grants 16 weeks of pay to employees who choose to resign rather than undergo a performance improvement plan (PIP). The catch: employees must make their decision within five days of receiving the offer.

Those who decline the payout will be placed on a PIP, which is widely regarded as a precursor to termination. Once on a PIP, employees forfeit the option of receiving the 16-week severance. Furthermore, employees who begin the PIP but later leave voluntarily or are dismissed will face a two-year ban on reemployment at Microsoft and will not be eligible for internal job transfers during that period.

The initiative is part of Microsoft’s continued efforts to restructure its operations and increase efficiency. Earlier this month, Economic Times reported that the company’s layoffs were tied to a larger push to streamline its organisational structure. Amy Coleman, Microsoft’s Chief People Officer, characterised the process as “transparent,” noting that the company is striving to address performance issues with fairness and clarity.

The restructuring comes at a time of ongoing turbulence in the tech sector. According to Trueup, a platform tracking industry layoffs, 234 job cuts have taken place in 2025 so far, affecting over 45,000 employees—averaging nearly 440 layoffs per day. By comparison, 2024 recorded over 1,100 layoff events, impacting more than 238,000 workers, according to the ET report.

Microsoft Focuses On AI

While Microsoft continues to invest heavily in its AI and cloud services, recent financial results have presented a mixed picture. Azure, the company’s flagship cloud platform, reported 31 per cent revenue growth in the fiscal second quarter, slightly missing analysts' expectations of 31.8 per cent. Similarly, revenue for the broader Intelligent Cloud division came in at $25.54 billion, falling just short of projections. Nonetheless, Microsoft’s total revenue rose 12 per cent year-over-year to $69.6 billion, exceeding market forecasts.