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Microsoft to lay off 11k employees

reuters.com

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Re: Microsoft to lay off 11k employees

#31

Post by CobrastanJorji »

Xeoncross wrote: post #4

I'm wondering what data really drives the back-and-forth at big tech. We've seen google, amazon, microsoft, meta, etc.. do hiring freezes, then layoffs. Hiring freeze, then back open, or layoffs then more layoffs later. I would expect a longer term plan than just looking forward or backwards one quarter which seems like what has been happening the last year. I would assume they had better information and insights tha…

I imagine it's three things. First and foremost, interest rates are up. Some development opportunities only make sense when loans are basically free. Second, the market's down, firing a bunch of people is a good way to boost stock prices in the short term, and people making these decisions are often primarily motivated by short term stock price gains. Third, big tech executives are heavily influenced by trends, they all talk to each other, and layoffs are trendy right now.

Layoffs are probably a bad idea, in general, given how expensive it is to hire new devs and bring them up to speed, but on the other hand, it's probably a pretty good way to eliminate orgs you wanted to get rid of anyway while blaming the economy. I'm sure it's not a coincidence that so many of Amazon's layoffs came from Alexa.

Re: Microsoft to lay off 11k employees

#32

Post by squokko »

ChicagoBoy11 wrote: post #25

It's hard not to read some of these stories and not think that somehow some of these companies are free-riding on the ability to do some firings with minimal pushback because of the "well, look at what everyone else is doing!" climate that exists now. I'm having a hard time teasing out how much of this is driven by some sort of fundamental analysis of the economy, some collective BigCo CEO shared thinking, or, at my…

That's what some of these companies have stated on the record. Like Zuck explicitly said that some people shouldn't be here, months before the layoffs.

Re: Microsoft to lay off 11k employees

#33

Post by rodgerd »

Xeoncross wrote: post #4

I'm wondering what data really drives the back-and-forth at big tech. We've seen google, amazon, microsoft, meta, etc.. do hiring freezes, then layoffs. Hiring freeze, then back open, or layoffs then more layoffs later. I would expect a longer term plan than just looking forward or backwards one quarter which seems like what has been happening the last year. I would assume they had better information and insights tha…

I've been privy to execs sharing the "why" for stacked ranking, open plan, layoffs, and various other decisions. If you had some naive belief in the efficacy of capitalism or the idea that CEOs are highly paid because of their brilliance you'd be very disappointed to discover how often the answer is "we're doing this because other companies like us are doing this", or "because an analyst told us we should do this".

Re: Microsoft to lay off 11k employees

#34

Post by mgkimsal »

11,000 people - let's say an average loaded cost of $250k/yr. That's... ~$3b/yr these folks cost MSFT. Granted, it's per year, but ... keeping these people on for another 3 years would cost ~$10b.

MSFT currently have $100b cash on hand. It's gotta be a little... frustrating to get be part of a 5% cut when there's so much free cash sitting around. I know, it's a narrow view of corporate finance, and I don't have the 'big picture', but... still doesn't sit right with me.

That said, I don't know what severance packages people are being offered. That might help soften the blow for some folks.

EDIT: re one reply about people earning $250k. I indicated 'loaded cost' - health insurance, likely some cost of options/stock, retirement matching, FICA and more. I possibly could have removed 'average'. I suspect many of the folks being cut have on paper salaries (well?) below $200k. Is the 11k number global or US only? Round the number down to $200k. It's closed to $2.2b/year then.

Re: Microsoft to lay off 11k employees

#36

Post by squokko »

reverius42 wrote: post #17
squokko wrote: post #7

Every Big Tech collects bad hires and these are the best times to get rid of them.

Why isn't "as soon as you know they are a bad hire" the best time to get rid of them?

It is, but it's difficult to do, needs documentation, etc., and most managers in Big Tech would rather not do it unless required to from above (which is what a layoff gives them the opportunity to do).

Re: Microsoft to lay off 11k employees

#38

Post by technofiend »

reverius42 wrote: post #17
squokko wrote: post #7

Every Big Tech collects bad hires and these are the best times to get rid of them.

Why isn't "as soon as you know they are a bad hire" the best time to get rid of them?

The overhead of managing someone out is far higher than that of a mass action laying off hundreds or thousands. I'm not saying I agree with sentiment.

Re: Microsoft to lay off 11k employees

#39

Post by cscurmudgeon »

rodgerd wrote: post #33
Xeoncross wrote: post #4

I'm wondering what data really drives the back-and-forth at big tech. We've seen google, amazon, microsoft, meta, etc.. do hiring freezes, then layoffs. Hiring freeze, then back open, or layoffs then more layoffs later. I would expect a longer term plan than just looking forward or backwards one quarter which seems like what has been happening the last year. I would assume they had better information and insights tha…

I've been privy to execs sharing the "why" for stacked ranking, open plan, layoffs, and various other decisions. If you had some naive belief in the efficacy of capitalism or the idea that CEOs are highly paid because of their brilliance you'd be very disappointed to discover how often the answer is "we're doing this because other companies like us are doing this", or "because an analyst told us we should do this".

If people were paid by brilliance most celebrities and politicians would be poor and mathematicians would be billionaires.

The world doesn’t work that way.

Re: Microsoft to lay off 11k employees

#40

Post by INeedMoreRam »

mgkimsal wrote: post #34

11,000 people - let's say an average loaded cost of $250k/yr. That's... ~$3b/yr these folks cost MSFT. Granted, it's per year, but ... keeping these people on for another 3 years would cost ~$10b. MSFT currently have $100b cash on hand. It's gotta be a little... frustrating to get be part of a 5% cut when there's so much free cash sitting around. I know, it's a narrow view of corporate finance, and I don't have the '…

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