Lately, there’s been a lot of buzz around performance layoffs. It’s a topic that hits close to home for many. These types of layoffs happen when companies decide who’s meeting expectations and who’s not. Makes you wonder though — are all these layoffs really about performance, or is something bigger going on?
Performance-based layoffs might be more common than you think. A 2024 survey of 600 business leaders showed half said 75% of their layoffs last year weren’t about cutting costs. Instead, many used layoffs to sidestep the conflict of firing low-performing employees.
Experts in employment law warn this approach can create tension and confusion within companies. While it’s legal to let go of underperformers, businesses need to be upfront and base their decisions on clear, fair reasons. Mislabeling layoffs as performance-related can also leave workers feeling unfairly blamed for workplace issues that may go deeper than their individual performance.
Microsoft and Meta are among companies using layoffs to target underperforming workers, blurring the line between legitimate workforce reductions and traditional firings. Recent job cuts, especially in high-growth tech firms expanded during the pandemic, have brought attention to this tactic. Earlier this year, Meta announced plans to cut 5% of staff, focusing on “low performers,” while Microsoft made a similar move. These layoffs are often justified as a way to reduce costs and improve efficiency, but some argue they shift blame onto employees while masking poor management practices.
In the U.S., performance-based layoffs also bypass legal requirements like the 60-day notice mandated by the Worker Adjustment and Retraining Notification Act, which doesn’t apply to such cuts. However, experts warn this approach risks including employees with legitimate claims, potentially leading to lawsuits.
Several former Meta employees have reported being dismissed shortly after returning from medical or maternity leave, raising concerns among current staff. Many employees now feel pressured to avoid risks, including taking parental or bereavement leave, out of fear for their job security. At Microsoft, layoffs labeled as performance-based have created internal anxiety, marking a shift in company culture. Under U.S. law, mass dismissals tied to performance do not require advance notice or severance, leaving impacted workers with fewer benefits. Some companies also restrict access to internal resources like application tools for employees let go due to performance, further disadvantaging them.
On the other hand, industry insiders note layoffs rarely tarnish a worker’s reputation, as hiring decisions in Silicon Valley often account for external factors like company politics.
So, why are tech companies laying off so many workers? According to The International Magazine and The HR Digest, it seems to come down to one thing: AI. Companies like Amazon, Meta, and Microsoft are cutting jobs while heavily recruiting for machine learning and AI-focused roles. The latest layoffs in 2024 and 2025 reflect a shift in hiring strategies — less about hiring broadly, more about targeting precision talent to build the next big thing in AI.
