Microsoft Cracks Down On Underperformers With New Policies, Including 2-Year Rehire Ban: Report

Microsoft Corp. MSFT is reportedly implementing new performance management policies, including a two-year rehire ban for underperforming employees.

What Happened: The company's chief people officer, Amy Coleman, informed managers about new tools to accelerate high performance and quickly address low performance, reported Business Insider on Tuesday, citing an internal email.

A key change includes a policy that bars employees with poor performance scores from transferring within the company or being rehired for two years after their departure.

“Employees with zero and 60% Rewards outcomes and/or on an active PIP will not be eligible for internal transfers. 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,” the email read.

Coleman's email also highlighted the importance of creating a transparent rewards process, with clearer guidelines for differentiating reward outcomes, the report said.

Why It's Important: This move is part of a broader trend in the tech industry, where companies like Meta Platforms, Inc. META have also cracked down on low performers.

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However, many affected Meta employees pushed back on the claim in public forums, asserting that they had no prior record of underperformance.

Last year, Barclays PLC BCS also reportedly laid off hundreds of employees in its investment banking division as part of an effort to remove underperformers.

Price Action: Microsoft shares rose 0.89% in Tuesday's pre-market session. However, year-to-date, the stock has declined by 14.21%, according to Benzinga Pro.

The company currently holds a growth score of 64.64% based on Benzinga Edge Stock Rankings. Click here to compare it with other players in the sector.

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