Silicon Valley is experiencing a significant shift towards a performance-based culture in 2025, with major tech companies like Google, Microsoft, and Meta intensifying their performance management systems.
Google's Performance Review Changes
Google is enhancing its performance review system, GRAD (Googler Reviews and Development), to reward high achievers with bigger bonuses and equity grants, effective for end-of-year reviews in 2025 and compensation planning in 2026. Managers now have more flexibility to assign the "Outstanding Impact" rating, allowing for increased rewards for top performers. These changes are budget-neutral, with funds for top-tier bonuses coming from slightly reduced rewards for mid-performance employees.
Microsoft's Stricter Performance Measures
Microsoft is implementing stricter performance measures, including a globally standardized Performance Improvement Plan (PIP). Underperforming employees are offered a choice between a 16-week payout to leave voluntarily or entering a PIP. Failing the PIP results in termination without severance and a two-year rehire ban. These changes aim to accelerate high performance and address performance concerns consistently.
Meta's Performance-Based Cuts
Meta initiated performance-based layoffs in early 2025, cutting approximately 5% of its workforce (around 3,600 employees). These cuts target employees with low performance scores. Some employees reported being laid off shortly after returning from parental or medical leave, raising concerns about potential unlawful bias or retaliation. Meta aims to "move out low performers faster" as part of its efficiency drive.
This industry-wide recalibration reflects a broader trend driven by AI investment and Wall Street's demand for efficiency, linking success to intensity and execution.