The PIP Has Reached Retirement Age. Modern Leadership Cannot Keep Using It as a Crutch

PIPs, layoffs, and AI washing: how a 50-year-old playbook stopped working — and what’s replacing it.

When the PIP Went Viral

Wall Street Journal, November 2024:

“The Most Hated Way of Firing Someone Is More Popular Than Ever. It’s the Age of the PIP.”

Not an opinion. Data.

Why now?

• Mass layoffs in 2024 and 2025
• AI pressure to cut faster
• Shareholders demanding immediate results
• A generational shift in what employees expect from work — that leadership has not caught up with

The result (Gallup, 2026): only 20% of the global workforce is truly engaged — the lowest level since 2020.

The Uncomfortable Truth: The PIP as Performance Theater

Multiple HR studies show more than half of employees assume a PIP means their job is already gone.

They’re right.

Harvard Business Review (November 2025) confirms it: • 15% complete the PIP successfully • 60% get fired • 25% go on stress-related medical leave — and rarely return

That is not a performance improvement program. It is a waiting room.

Even legal commentators acknowledge PIPs often function “primarily as legal cover against employment lawsuits” — to fire you with less risk, and often without severance.

The Angle Nobody Wants to Talk About: PIPs as a Market Signal

Companies don’t just manage people. They manage narratives.

When results fall short — systemic failures, poor leadership, overhiring, overpromising — layoffs and PIPs send one message:

“We are in control of our margins.”

According to NPR (January 2024), the goal of mass tech layoffs was simple: satisfy Wall Street. As one expert quoted in the report put it, layoffs have become normalized — companies “are getting away with it because everyone is doing it, and investors love it.”

Tech layoffs, globally:

• 2024 → 260,000+ jobs cut (BestBrokers / TrueUp)
• 2025 → ~245,000 worldwide (RationalFX)
• 2026 (through Q1 + April) → 94,000+ — 885 people per day

Oracle, Meta, Amazon, Snap, Disney, Epic Games — weeks, not months.

48% of Q1 2026 cuts were attributed to AI. But Forrester Research found most companies “do not have mature AI applications ready to fill those roles” — financial cuts dressed up as innovation.

Two narratives. One convenient omission:

• Internal: “This person is not performing”
• External: “We manage talent with rigor”
• Left out: goals were unrealistic — and the headcount decision was made before the process began

The Strategy Is Backfiring — And the Numbers Prove It

Goldman Sachs (December 2025) documented a notable reversal:

• Investors are now punishing companies that announce mass layoffs
• Stocks dropped an average of 2% following layoff announcements
• Companies citing restructuring faced even harsher punishment
• The market is no longer reading cuts as discipline — they signal something is structurally wrong

And the companies doing the cutting are starting to realize it too:

• 55% of employers already regret AI-attributed layoffs (Forrester, 2025)
• Half of those layoffs are predicted to be quietly reversed — jobs returning offshore or at lower salaries

The bet that cutting people proves leadership competence is starting to fail.

And the human cost is already visible. Gallup State of the Global Workplace 2026:

• 20% engaged at work
• 64% on autopilot — present, but checked out
• 16% actively working against their organization
• Cost: $10 trillion/year — 9% of global GDP

The emotional data is just as stark:

• Stress, anger, and sadness remain above pre-pandemic levels
• Leaders report more stress, loneliness, and sadness than the people they manage

This is not a temporary reaction. It is the new normal.

There Is Another Way to Lead. And It Works

There are different ways to lead. One of them — backed by over 20 years of research and zero contradicting results from Dr. Kim Cameron at the University of Michigan — starts here.

Positive leadership drives measurable gains in profitability, quality, and customer satisfaction.

Nearly 50% of what separates a high-performing organization from an average one has nothing to do with strategy, technology, or market conditions. It comes down to how leaders treat people.

4 domains any leader can activate today:

1. Build a Positive Climate

• Not about eliminating problems — about building the emotional reserve to face them
• The three virtues that create it: compassion, gratitude, and forgiveness
• Leaders who cultivated these consistently outperformed traditional leaders in financial results

2. Create High Quality Connections

• A genuine question. Active listening. Recognizing a specific effort — not a generic “good job”
• Relational energy does not deplete when shared. It multiplies
• Top-performing organizations have 3x more people who do this naturally

3. Change the Ratio of Your Communication

• High-performing organizations: 5 positive messages for every 1 negative
• Below 3:1 — the culture enters decline
• This ratio predicts performance better than IQ, experience, or academic background

4. Connect Work to Purpose

• When work feels meaningful, stress decreases, absenteeism drops, performance rises
• It does not depend on the type of work — it depends on how the leader frames it
• It requires a conversation, not a budget

Conclusion

This is not the first time the way we work has demanded a reset.

• Every era has had its breaking point
• Every time, the trigger was the same: the existing model stopped delivering what it promised
• Every time, a reset followed

We are at that inflection point again:

• AI is reshaping every role
• Burnout is at historic highs
• Trust in leadership is at record lows
• A generation of workers has redefined what they expect from work

The reset is not coming. It is already here — whether leadership is ready or not.

Have you lived through this? What did it take for your organization to start doing things differently? I’d love to hear from you.

References

BestBrokers. (2025). Tech layoffs tracker 2024: Global data. https://www.bestbrokers.com/

Bhave, D. P., & Cheah, S. M. (2025, November–December). Case study: Should a CHRO abandon performance improvement plans? Harvard Business Review. https://hbr.org/2025/11/case-study-should-a-chro-abandon-performance-improvement-plans

Cameron, K. S. (2008). Positive leadership: Strategies for extraordinary performance. Berrett-Koehler Publishers.

Forrester Research. (2025). Predictions 2026: The future of work. https://www.forrester.com/press-newsroom/forrester-impact-ai-jobs-forecast/

Gallup. (2026). State of the global workplace: 2026 report. https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx

Goldman Sachs Global Investment Research. (2025, December). Layoffs and stock performance: Investor sentiment shift [Reported in Fortune]. https://fortune.com/2025/12/25/goldman-sachs-research-ceos-layoffs-stock-price/

Losada, M., & Heaphy, E. (2004). The role of positivity and connectivity in the performance of business teams. American Behavioral Scientist, 47(6), 740–765.

Meraji, S. M., & Horsley, S. (2024, January 28). Nearly 25,000 tech workers laid off in the first weeks of 2024. NPR. https://www.npr.org/2024/01/28/1227326215

RationalFX. (2026, January). Global tech sector layoffs: Nearly 245,000 jobs cut worldwide in 2025. https://www.rationalfx.com/forex-brokers/global-tech-sector-layoffs/

TrueUp. (2026). Tech layoffs tracker. https://www.trueup.io/layoffs

Weber, L., & Cutter, C. (2024, November 29). The most hated way of firing someone is more popular than ever. The Wall Street Journal. https://wsj.com/business/firing-someone-performance-improvement-plans-more-popular-the-pip-7cac7062