Microsoft has laid off nearly 2,000 employees deemed low performers this year as part of a reevaluation of its performance review process. Historically known for a tough review system, Microsoft softened its approach under CEO Satya Nadella. However, concerns about the company becoming too lenient have prompted a shift back towards a high-performance culture. This change involves input from new leaders like ex-Google executive Mustafa Suleyman and former Meta engineering chief Jay Parikh, alongside existing executives. The broader tech industry is also seeing layoffs as companies focus more on profitability. Microsoft’s recent terminations included abrupt exit letters stating that employment was ended due to not meeting performance standards. The company maintains that it has the right to fire based on performance, provided it’s not for unlawful reasons. Microsoft’s previous stack ranking system, abandoned in 2014, forced managers to rank employees, often pitting them against each other. The current system uses a ‘ManageRewards slider’ scale from 0 to 200, impacting stock awards and bonuses. Low performers are managed out through a process that can take up to seven months, sometimes delayed by leaves of absence. Microsoft is also considering ways to become leaner and more engineering-focused, borrowing concepts like ‘good attrition’ and the ‘Builder Ratio’ from Amazon. — news from Business Insider
