Microsoft enforces 2-year rehire ban for underperformers

In a significant move to reinforce performance accountability, Microsoft has introduced a two-year rehire ban for former employees let go due to underperformance.

According to a Business Insider report, these departures are being labeled internally as “good attrition,” signaling the company’s drive to maintain a workforce aligned with high productivity standards.

The rehire restriction comes alongside a revamped Performance Improvement Plan (PIP), which offers employees two choices: participate in a formal improvement program or opt for a voluntary exit package. Those who choose the PIP but fail to meet the outlined benchmarks face termination and will be barred from rejoining the company for two years.

This overhaul is part of Microsoft’s broader push to cultivate a high-performance culture, particularly as it intensifies focus on core growth areas such as artificial intelligence and cloud computing. The tech giant is joining peers like Amazon and Meta, which have also embraced tougher performance management strategies in recent months.

Earlier this year, Microsoft reportedly terminated 2,000 underperforming employees without offering severance. However, under the current framework, employees who voluntarily exit through the new separation agreement will receive a payout equivalent to 16 weeks of salary. Internal emails reviewed by Business Insider confirm that this policy is now globally standardised, with transparent timelines and expectations.