Microsoft Adopts Tough Stance on Layoffs: No Severance Pay, Immediate Termination

Performance-based job cuts leave employees without severance or benefits, signaling a stricter corporate policy.

February 1, 2025: Microsoft Tightens Layoff Policies Amid Performance Concerns

Microsoft has initiated a wave of performance-based layoffs, terminating employees effective immediately without severance packages, according to internal termination letters obtained by Business Insider. This move is part of the company’s broader efforts to address underperformance while optimizing resources.

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Key Highlights:

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1. No Severance Pay: Affected employees will not receive severance packages, marking a significant shift from typical industry practices.
2. Immediate Impact: Employees lose access to healthcare, prescription, and dental benefits on their final day, alongside system and building access.
3. Return of Assets: Employees are instructed to return all company property, including hardware, software, and corporate cards.
4. Future Job Applications: Microsoft warns that future applications will consider the reasons for termination, potentially affecting re-employment opportunities.

A Microsoft spokesperson justified the stringent measures, stating, “We focus on high-performance talent and take appropriate action when expectations are not met.”

Layoffs Across Divisions:

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The performance-related cuts coincide with broader layoffs affecting divisions like Security, Experiences and Devices, sales, and gaming. However, Microsoft clarified that these terminations would not significantly impact headcount, as the company plans to backfill critical positions.

With approximately 228,000 full-time employees globally as of June, the company remains committed to upholding its Employee Agreement, requiring terminated staff to delete any company materials from personal devices and maintain confidentiality post-employment.

This approach reflects Microsoft’s intensified focus on performance management during a period of ongoing global layoffs.

Tags:

Microsoft Layoffs, Performance-Based Terminations, No Severance Policy, Corporate Layoff Practices, Employee Rights, Tech Industry Job Cuts