Microsoft (MSFT-1.25%) has reportedly axed almost 2,000 workers so far this year, but the cuts aren’t being announced as a byproduct of declining macroeconomic conditions or the fallout from tariffs. Instead, the company is pinning the eliminations on performance, Business Insider reported.
The cuts affect only a small percentage of Microsoft’s overall workforce, which, according to the company’s most recent annual report, is around 228,000. However, employees at the company are still feeling the impact.
Microsoft spokesperson Frank Shaw told Business Insider that the company is trying to give managers more tools to make expectations clear.
“We aspire to have a high-performance culture and want to make sure managers have the ability to drive that and that expectations are clear,” Shaw said, adding that the company isn’t trying to design a tougher system, but one that removes ambiguity, provides clarity and flexibility, and allows managers and teams to move with speed.
But employment experts are skeptical of Microsoft’s approach.
“Let’s call it what it is — these so-called ‘performance’ evaluations are often less about genuine employee productivity and more about balancing the bottom line,” said Career Nomad CEO Patrice Williams-Lindo. She told Quartz that when profit margins start to shrink, performance metrics decide who stays and who goes.
“It’s a strategic maneuver wrapped in the guise of objectivity, but the real cost is often the loss of valuable talent and the erosion of workplace culture—all for the sake of short-term financial gains,” said Williams-Lindo.
Williams-Lindo added that performance-based terminations become a convenient cloak for budget cuts, leading to a workforce that feels disposable and a culture that breeds fear over performance.
“This isn’t just bad for morale—it’s bad for business,” Williams-Lindo said.
Amy Spurling founder and CEO of employee benefit platform, Compt, agreed, but said packaging the terminations as performance-related layoffs may help shield the company from bad publicity.
“They allow companies to make targeted cuts while maintaining the narrative that they’re simply enforcing standards. So they can likely avoid the PR hit that comes with announcing layoffs,” Spurling said.
Still, she noted that framing strategic workforce shifts as purely performance-based can damage trust with departing employees and those who remain.
“And if companies want to maintain trust, they need to be transparent about the business realities driving these decisions,” Spurling said.
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