Tech giants like Amazon and Meta are overhauling their performance evaluation systems, and experts say the changes could lead to more layoffs and layoffs.
Amazon announced on January 28 that it would cut 16,000 jobs, on top of 14,000 in October, but is asking employees to submit three to five “accomplishments,” Business Insider reported last month, citing people familiar with the matter and internal documents viewed by BI. The report notes that the company has asked questions to that effect before, but says this is the first time Amazon has “explicitly formalized” a system for all employees within the company regarding individual performance.
Meta, which announced layoffs affecting 1,000 employees in January, will now divide its workforce into top 20%, middle 70%, bottom 7% and bottom 3%, BI separately reported, citing an internal employee memo. Top performers with “truly extraordinary impact” will be rewarded with up to 300% of their base bonuses.
“We are evolving our performance program to simplify it and are focused on rewarding great performance,” a Meta spokesperson told Make It. “While our employees have always adhered to a culture of high performance and impact, this new direction allows for more frequent feedback and recognition in a more efficient manner.” Amazon has not responded to Make It for comment.
Stack rankings like Meta’s system are not uncommon in large companies, especially in the technology industry. “It’s not just a stick, it’s a carrot,” says Saikat Chaudhry, faculty director of the Management, Entrepreneurship and Technology Program and Entrepreneurship Hub at the Haas School of Business at the University of California, Berkeley. And it’s not new (or even that surprising) for employers to ask workers to summarize their performance for the year when conducting performance reviews.
But the changes are also unfolding against a backdrop of mass layoffs at both companies and the economy as a whole. Layoffs announced last month were the highest for January since 2009, according to a report released last week by Challenger, Gray & Christmas, a global outplacement firm.
When it comes to cracking down on performance reviews, “the most common reason companies do this is because they really want to reduce headcount,” says Peter Cappelli, a management professor at the Wharton School at the University of Pennsylvania and director of the Wharton Human Resources Center.
“It’s cheaper to fire someone for poor performance than it is to fire someone,” Cappelli says.
Only “those who demonstrate the highest performance”
Executives sometimes think their bosses aren’t tough enough on “finding people who aren’t performing and doing something about them,” Cappelli said. An overhaul of work obligations, alongside changes such as return-to-office orders and increased oversight to enforce those obligations, could signal an attempt to “take back power and control” following mass redundancies in the employee labor market.
Chaudhry added that companies may still be “rightsizing” after overhiring during the pandemic-induced technology boom. During that time, “companies needed employees, but they couldn’t keep up,” Chaudhuri said. “That’s not the case now. Now they want the best talent.”
Chaudhuri said companies may want employees to detail their performance, as attrition in middle management has “reassigned reporting relationships.” A manager who suddenly takes over a subordinate from another manager who was fired may not understand the full scope of the new subordinate’s job.
Chaudhry says leaders may also be taking a page from Elon Musk’s book. In an effort to cut costs and reduce staffing, DOGE has asked federal employees to submit weekly lists detailing what they have done.
“It’s that time again.”
Pressure from shareholders and competition to defeat competitors in AI wars are driving efficiency.
“This is the age of fermentation,” Chaudhry says of AI. “Each company needs to evaluate how to operate in the leanest way at every turn, especially in times of disruption.”
U.S.-based employers announced 108,435 layoffs last month, a 118% increase from the 49,795 layoffs announced last January, and a 205% increase from the 35,553 layoffs announced in December, according to a report in Challenger. (About 40% of last month’s cut announcements came from Amazon and UPS alone.) The unemployment rate rose steadily through 2025, hitting a four-year high of 4.6% in November.
In this context, changes in performance appraisal can have far-reaching effects. Fears of further layoffs in the future and increased scrutiny of daily performance expectations could put pressure on employees to work harder, Chaudhuri said.
It could also encourage employees who may have received poor reviews to resign voluntarily to avoid possible termination, he added. While this may save companies some money in severance in the short term, it can ultimately damage a company’s reputation.
When the labor market shifts back in favor of employees, Chaudhuri says, companies “need to make the incentives very strong so that people don’t overlook the reputational damage that could come from that.”
So far, Chaudhry sees the message tech companies are sending to their employees as: “You have to work long hours. You have to give it your all. It’s that time again.”
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