Proprietary Software Giant Microsoft is Quietly Laying Off Lots of Employees, Insider Explains How It's Done

posted by Roy Schestowitz on Oct 03, 2026

PIPs and fake "retirements"

Yesterday somebody wrote about Microsoft exits (many executives too "leave" these days). To quote:

Something unusual seems to be happening with Microsoft exits during the current rewards cycle.

There are multiple reports of employees going into a rewards discussion and being told their employment is ending. But the exit terms do not seem consistent.

Some people say they were given a choice between a PIP and a separation package. Others say they were terminated immediately with no PIP option. A few say they received little or no severance at all.

There are also reports from people who say their previous Connects and performance discussions were generally fine, which makes the sudden termination especially confusing.

The bigger question is whether Microsoft is treating these strictly as performance cases or whether performance ratings are also being used as a mechanism to reduce headcount quietly across different organizations.

Because these appear to be individual or small-group exits rather than one large announced layoff, it is difficult to know how widespread this is.

For those affected recently: what reward rating did you receive, were you offered a PIP, and what severance package were you given?

It's therefore not surprising that we recently as hours ago [1-3] we still saw reports about workers preparing to be sacked by Microsoft. █

Related/contextual items from the news:

1. The Coalition Staff Fear Layoffs Instead of Celebrating Gears of War E-Day Launch

   Employee anxiety has intensified following large-scale organizational changes at Xbox.

   Staff members at The Coalition are concerned about potential new layoffs across Microsoft and Xbox. According to Eurogamer, citing sources within the studio, the team spent recent months working intensely on Gears of War: E-Day. Instead of celebrating the release, however, employees fear another wave of job cuts.

   According to one source, the current mood inside the studio can be described as follows: “Let’s not celebrate until three months after release, just in case.” The insider noted that such an atmosphere is highly unusual for the team.

2. Gears of War: E-Day Earns Strong Reviews, But The Coalition Developers Fear Layoffs

   The embargo for Gears of War: E-Day ended yesterday, and the scores from the media made it clear that we are looking at one of the best Xbox exclusive games of this generation. However, that is no longer a guarantee of continuity at the company. In fact, some members of The Coalition fear being fired.

   The scores for The Coalition’s game have been among the best received by a Microsoft game in recent years. However, inside The Coalition, instead of celebrating the success, there is a kind of tense calm because of the current situation at Xbox.

3. After 'Crunching Hard' Through Their Final Months, Gears of War: E-Day Developers Are Reportedly Now Expecting Layoffs

   Gear of War: E-Day developers are reportedly in no mood to celebrate the game's imminent release, following months of overtime and fresh fears of further layoffs.

   That's according to a Eurogamer report that includes comments from various sources at The Coalition, Microsoft's dedicated Gears of War team that has been working on E-Day for the past five years.