MSFT manager of 25+ person team here with no actual heads up on this. The writing has been on the wall for months though from internal comms so this should come as a surprise to no one.
No one on my team has any information about this beyond the Satya email, so this is either a "no news is good news" situation (assuming you don't actually want to be laid off), or a poorly executed process. I'm hoping for the former for the sake of my team.
It is a poorly executed process: "... the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3". So employees will have to live with uncertainty for the next three months!
I know some teams who had a sudden team meeting scheduled by their skip manager for 9 am today. I suspect this is how organization changes will be communicated to affected teams.
Not true. Companies share material non public information internally. What they do is they have blackout periods where you cant trade the stock, and constant reminders not to trade based upon material non public information (insider trading)
Tl;DR = possessing insider info != insider trading
Generally speaking, with a layoff, they want all employees to hear it from official sources and not internal rumors.
People asking VPs about layoffs in public AMAs and getting answers to the effect of "it's our responsibility to make sure that we're right-sized for the upcoming year."
Cost cutting. Move to floating desk and reduction in building space. There were few more things. But the shift to floating seats was a big indicator that serious cost cutting is happening. And everyone guessed that layoffs are next.
I am based in India. US folks would have seen different signs
It's designed so that no one can be blamed because you never know who took the decision and that no one has a chance to speak up against it.
My understanding is also that during mass layoffs big companiess can't just cut all low performers / juniors so this might be completely random but we just don't get to know that.
How can you actually signal you want to be laid off? Is that something you say when the news goes out? Loads of "NoFuture" cooperate punk in the FAMG. Monopoly does not make the work interesting.
In places where a "consultation process" is legally mandated, that's one of the things you get to discuss. In UK redundancies I have been asked "do you want to take voluntary redundancy?"
Can you give an example of what a broadly speaking internal comm(not anything specific to MSFT) would look like that might be a red flag for future layoffs?
While there is no good way to do a mass-layoff, I don't particularly like the way this was communicated. There's a lot of flowery language and the fact that there will be massive layoffs is only said in passing in the third paragraph.
This will never be good news, obviously, but please communicate the important facts clearly.
The only honest thing he could have said would be: "Look, in the end this about shareholder value and we need to sacrifice some people in order to create shareholder value. I know, it sucks, but let's not kid ourselves, we all knew that's the game we are playing here at Microsoft (or any publicly traded company). We got some nice perks while it lasted but unfortunately the party is over now. We will do our best to ensure everyone affected gets a fair severance package.".
"Look, investors have low confidence in the market right now and all our competitors are doing it. I need to send a signal or the stock is going to keep going down and I wont get my full yearly bonus. In the end it's all about the quaterly share price. I know, it sucks, but let's not kid ourselves, we all knew that's the game we are playing here: go work for a small company if you want long term strategy. We might buy you when you are done innovating. You can always come back next year if it's a hiring market anyway."
I mean I don't understand the big announcement in the first place; with a company that large, reducing staff count by 10K can be done organically, simply by not hiring replacements.
Which makes me think of two things; one, they want to get rid of very specific people, people who wouldn't quit on their own. And two, that they can't just reduce staff count without an announcement, because staff count is one of those metrics that shareholders use to determine whether they're staying, buying or selling stocks.
A quiet reduction of staff? They can't hire people anymore, this is bad, I should sell my stocks!
A round of layoffs? They're cutting costs, which will be good for profits, I should buy more! Or sell because I've lost confidence.
Honestly, the stock market and shareholders are not rational.
The announcement itself has an "if-by-whiskey" feel to it. On the one hand, they claim to be "aligning cost structure with revenue". On the other hand, they also claim to be investing in "strategic areas for our future". It tries to spin it in a way that appeals to both value and growth investors respectively.
Some low performing employees just wont leave on their own. Sometimes its the higher performers who feel they deserve more compensation and leave. With your proposal the company could end up with only the low performers which is the opposite intent of a layoff
Layoffs over a certain size in a location have to be announced legally, WARN act I think is the name.
Usually reductions in staff are well received by Wall Street because operating expenses should be reduced. I think there's a joke about a CEO saying "oh stocks down, time for layoffs!"
I hate it when head honchoes try and get cozy with you by signing off with their First Name only --way to take the name away from anyone else in the company with the same name. 99% of the people in a large company like that never met you and don't know you on a first-name basis.
It's an attempted mind fuck to disguise the true power dynamic. If they say "we're making cuts, you're done. Leave your laptop on your desk and clear off", it's clear what the power dynamic is.
Instead they present themselves as your friend. Even if you don't believe it, social norms dictate that in general you act like you do. Like Zizek says, "fuck you, you're a boss, act like it!". Then you're unsure of what's happening. Do they really feel bad? Maybe they're trying their best, maybe they really care about me personally.
It's same with all this corporate-speech that's been emerging recently. They're not your family, they're not your friends, and if it comes to it they will fist you so hard you'll be tasting their perfectly-manicured nails.
I think it's very important to always have this in mind and not to tie up your identity with your work. You are a line item on a spreadsheet somewhere to them, nothing more. If you start believing otherwise you are setting yourself up for mental health problems when your use runs out and they kick you to the kerb.
Satya is appointed by shareholders, not by employees. Employees can't fire Satya.
And while employees might give him a hard time for this, shareholders can definitely give him a harder time if they see a (potential) decline in dividend. So cutting cost to keep dividends steady with a decline in profitability and revenue is the easiest fight for him.
While it sucks, when working for a large tech company which is publicly traded like Microsoft antics like this should be no surprise to anyone.
> shareholders can definitely give him a harder time
What's the worst they can do? Fire him? He's worth somewhere between $300m-$800m according to Google. Even if he's "only" worth $100m. He'll never have to worry about providing/monthly expenses to cover rent/food. Can't say the same for employees. Obviously that's not his responsibility/concern. Just an interesting take.
What's harder? Getting squeezed by shareholders or being unable to afford your rent?
Most employees at tech firms, Microsoft included, are awash in their employer's stock. It's not in their best interest to intentionally tank the stock.
Tech workers as a population are rather anti-union. Things need to get a lot worse before most will get on board with one, unfortunately. Everybody thinks they're a special snowflake getting one over on the company.
Those 10k in this case appear to be the low performing or team shutdowns where transferring doesn't make sense.
5% headcount reduction is attainable just by freezing hiring and letting churn happen and performance management.
With nearly any company I've seen employees who can dodge performance but are a low performing employee. It drags down their team, and makes your high performers quit.
Layoffs like this might not even have front line managers input aside from, "who is critical to keeping the lights on in the company". All those things that have helped an employee avoid being PIP'ed out are gone.
The managers who I've talked to in these situations will almost always pick their high performing individuals regardless, because they know if they don't they'll be cut next due to poor performing team.
Is Microsoft laying off executives too? Or will this only affect the rank and file?
IME, if the company does not let go of executives, they are just tagging along with their peer companies on the layoff train. If they do make cuts at the VP/SVP level then the company really does have margin/profitability issues.
You must be new here. I work for a blue chip Fortune 200 widely known for their binge-and-purge cycles. Management is never affected. They just reshuffle the cards.
I've been predicting another "purge" in 2Q, but I suspect we will lag the tech sector, so maybe it will be EOY.
If the evidence suggested that periodic layoffs are good for company longevity and profit margins, you can bet that none of these academics would shout it from the rooftops.
Moreover, none of the evidence was collected under the current economic environment, where a decade of cheap money and growth fantasies have fueled an unsustainable hiring frenzy.
There was a sentiment in an earlier discussion [0] that this is "a war on tech wages" but for years the argument was that tech will make many other jobs obsolete (which would justify wage growth for tech employees).
Remember, e.g., the Jack Ma era and his proclamations that we should all get into arts because tech will take care of the rest?
Is the current round of layoffs an admission that the "software will eat the world" scenario will not happen or an indication that it can be done with even fewer tech employees?
During growth, you make big plans and you invest in growth. You hire people to build new things.
Oh snap. Growth is gone.
You cancel your lofty plans and you stick with things that are working. Anyone who was hired for grand plan things is a burden and let go. Sure. Some under performers too, but I don’t think this current wave in the cycle is the end of software eating the world.
Yeah Stable Diffusion, Midjourney and the ilk are going to automate away some of the art jobs, or at least some of the workflow involved in art (concept art etc)
related: book tour by Rebecca Giblin and Cory Doctrow to discuss their new book, Chokepoint Capitalism! -- This conversation will explore a call to action for the creative class and labor movement to rally against the power of Big Tech and Big Media.
Neither. The assumption is that, due to various reasons, the world in need of eating will shrink next year (if not later this year). As software requires a not insignificant amount of time to develop, work intended to eat next year is in development now, which means less work to go around compared to last year.
It is quite possible that these businesses are wrong about the future. They have been before. But as predicting the future is impossible, one has to make an educated guess and live with it.
> Is the current round of layoffs an admission that the "software will eat the world" scenario will not happen or an indication that it can be done with even fewer tech employees?
Either statement is reading too much into it. It's a reaction to economic conditions and the state of the labor market.
The Ontario government did something like this during the recession in the 80s. There were "Rae Days" a dozen forced unpaid days off for the public service to both save money and jobs, named after the premier of the time, Bob Rae.
Rae Days were reviled and helped end the viability of Rae's party the Ontario NDP.
The thing is... I don't get it? Would people have rather had mass layoffs? Rae 100% did the right thing here IMO.
Readit News
No one on my team has any information about this beyond the Satya email, so this is either a "no news is good news" situation (assuming you don't actually want to be laid off), or a poorly executed process. I'm hoping for the former for the sake of my team.
Except people care even less about your job experience since you're "leadership" now and are expected to toe the line no matter what.
Tl;DR = possessing insider info != insider trading
Generally speaking, with a layoff, they want all employees to hear it from official sources and not internal rumors.
What did the hints look like?
I am based in India. US folks would have seen different signs
I guess there are complexities with huge multinational companies, but that seems kind of designed to make people like your team worry.
My understanding is also that during mass layoffs big companiess can't just cut all low performers / juniors so this might be completely random but we just don't get to know that.
One of my cards was SO CLOSE, but he needed to galvanize some.
My rightmost column had Leadership, Accelerate, Innovative, and Challenge. Missing Galvanize.
This will never be good news, obviously, but please communicate the important facts clearly.
Anything else is basically a lie.
"Look, investors have low confidence in the market right now and all our competitors are doing it. I need to send a signal or the stock is going to keep going down and I wont get my full yearly bonus. In the end it's all about the quaterly share price. I know, it sucks, but let's not kid ourselves, we all knew that's the game we are playing here: go work for a small company if you want long term strategy. We might buy you when you are done innovating. You can always come back next year if it's a hiring market anyway."
He could have left that part out.
Which makes me think of two things; one, they want to get rid of very specific people, people who wouldn't quit on their own. And two, that they can't just reduce staff count without an announcement, because staff count is one of those metrics that shareholders use to determine whether they're staying, buying or selling stocks.
A quiet reduction of staff? They can't hire people anymore, this is bad, I should sell my stocks!
A round of layoffs? They're cutting costs, which will be good for profits, I should buy more! Or sell because I've lost confidence.
Honestly, the stock market and shareholders are not rational.
https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
The announcement itself has an "if-by-whiskey" feel to it. On the one hand, they claim to be "aligning cost structure with revenue". On the other hand, they also claim to be investing in "strategic areas for our future". It tries to spin it in a way that appeals to both value and growth investors respectively.
Usually reductions in staff are well received by Wall Street because operating expenses should be reduced. I think there's a joke about a CEO saying "oh stocks down, time for layoffs!"
I hate it when head honchoes try and get cozy with you by signing off with their First Name only --way to take the name away from anyone else in the company with the same name. 99% of the people in a large company like that never met you and don't know you on a first-name basis.
Instead they present themselves as your friend. Even if you don't believe it, social norms dictate that in general you act like you do. Like Zizek says, "fuck you, you're a boss, act like it!". Then you're unsure of what's happening. Do they really feel bad? Maybe they're trying their best, maybe they really care about me personally.
It's same with all this corporate-speech that's been emerging recently. They're not your family, they're not your friends, and if it comes to it they will fist you so hard you'll be tasting their perfectly-manicured nails.
I think it's very important to always have this in mind and not to tie up your identity with your work. You are a line item on a spreadsheet somewhere to them, nothing more. If you start believing otherwise you are setting yourself up for mental health problems when your use runs out and they kick you to the kerb.
And while employees might give him a hard time for this, shareholders can definitely give him a harder time if they see a (potential) decline in dividend. So cutting cost to keep dividends steady with a decline in profitability and revenue is the easiest fight for him.
While it sucks, when working for a large tech company which is publicly traded like Microsoft antics like this should be no surprise to anyone.
What's the worst they can do? Fire him? He's worth somewhere between $300m-$800m according to Google. Even if he's "only" worth $100m. He'll never have to worry about providing/monthly expenses to cover rent/food. Can't say the same for employees. Obviously that's not his responsibility/concern. Just an interesting take.
What's harder? Getting squeezed by shareholders or being unable to afford your rent?
Let’s see how fast the stock tanks then :)
Dead Comment
That's enough time for a new bachelor's degree.
5% headcount reduction is attainable just by freezing hiring and letting churn happen and performance management.
With nearly any company I've seen employees who can dodge performance but are a low performing employee. It drags down their team, and makes your high performers quit.
Layoffs like this might not even have front line managers input aside from, "who is critical to keeping the lights on in the company". All those things that have helped an employee avoid being PIP'ed out are gone.
The managers who I've talked to in these situations will almost always pick their high performing individuals regardless, because they know if they don't they'll be cut next due to poor performing team.
IME, if the company does not let go of executives, they are just tagging along with their peer companies on the layoff train. If they do make cuts at the VP/SVP level then the company really does have margin/profitability issues.
You must be new here. I work for a blue chip Fortune 200 widely known for their binge-and-purge cycles. Management is never affected. They just reshuffle the cards.
I've been predicting another "purge" in 2Q, but I suspect we will lag the tech sector, so maybe it will be EOY.
What level?
Typical corporation structure I've seen is
CEO -> CEO -> SVP -> VP -> Director -> Managers
You're saying the managers at the bottom are generally safe? I feel like that's not typically true?
https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
Moreover, none of the evidence was collected under the current economic environment, where a decade of cheap money and growth fantasies have fueled an unsustainable hiring frenzy.
Remember, e.g., the Jack Ma era and his proclamations that we should all get into arts because tech will take care of the rest?
Is the current round of layoffs an admission that the "software will eat the world" scenario will not happen or an indication that it can be done with even fewer tech employees?
[0] https://news.ycombinator.com/item?id=34417750
During growth, you make big plans and you invest in growth. You hire people to build new things.
Oh snap. Growth is gone.
You cancel your lofty plans and you stick with things that are working. Anyone who was hired for grand plan things is a burden and let go. Sure. Some under performers too, but I don’t think this current wave in the cycle is the end of software eating the world.
It is quite possible that these businesses are wrong about the future. They have been before. But as predicting the future is impossible, one has to make an educated guess and live with it.
Either statement is reading too much into it. It's a reaction to economic conditions and the state of the labor market.
Rae Days were reviled and helped end the viability of Rae's party the Ontario NDP.
The thing is... I don't get it? Would people have rather had mass layoffs? Rae 100% did the right thing here IMO.