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Microsoft to lay off 11k employees

reuters.com

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Re: Microsoft to lay off 11k employees

#41

Post by MuffinFlavored »

anonporridge wrote: post #24
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…

Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork. It's advantageous to have regular rolling layoffs because of this if you can justify them by economic conditions. There's also an effect of wanting to do smaller, pulsating layoffs over the course of many months or even years rather than one massive layoff of the size you actually need, because ultimately no one knows ex…

What % of their work force is 11k employees? Article says 5%.

Would also be curious to know what % of the 11k are engineers/breakdown by department/org, etc.

Re: Microsoft to lay off 11k employees

#42

Post by ethbr0 »

CobrastanJorji wrote: post #31
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…

Assume a constant need to fire a decent chunk of the company.

If you fire when everyone else is hiring, the market asks you if your growth prospects have dimmed.

If you fire when everyone else is firing, the market says you're being financially responsible.

Re: Microsoft to lay off 11k employees

#43

Post by nickdothutton »

Corporate excellence programmes are about removing the bottom 10% of performers. However most mass lay-offs aren’t about that kind of performance, they are the answer to the question asked by the buy-side analyst: “If companyX spends 5% on areaY, and you spend 7%, where’s should I look for the benefit delivered in your results, because I’m not seeing it.” I’ve been there.

Re: Microsoft to lay off 11k employees

#44

Post by qeternity »

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 '…

Why would they spend any amount much less $3b or $10b to keep people they don’t need/want?

Re: Microsoft to lay off 11k employees

#45

Post by thrashh »

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…

Well if you’re not hiring, your competitor is picking up the talent

Plus the more people that you have, the faster you can get competitive products out to market

Could be a damned if you do, dammed if you don’t situation

Re: Microsoft to lay off 11k employees

#46

Post by MuffinFlavored »

aliljet wrote: post #21

This is a curious decision. Microsoft shows a ~73 billion dollar net income [0] and it's probably reasonable to assume their shareholders are enjoying a robust, growing business. I wonder what they believe this reduction in staff is meant to provide? Will this really and meaningfully move their bottom line or will it better tighten the performance characteristics of the staff? [0] https://www.sec.gov/ix?doc=/Archives…

> I wonder what they believe this reduction in staff is meant to provide?

An increase in profitability most likely?

If we can agree "you need to have + pay employees in order to deliver projects which grow revenue", I don't know how they expect to grow with "less employees" delivering on less growth projects?

Re: Microsoft to lay off 11k employees

#47

Post by ethbr0 »

lazypenguin wrote: post #2

> The company had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally, as of June 30, according to filings. The size of these organizations always catch me off guard. 11,000 is a huge number but 221,000 is even more staggering!

Historically (not sure if still true), Microsoft had top tier profit:employee.

Re: Microsoft to lay off 11k employees

#48

Post by llIIllIIllIIl »

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?

BigCo has a tedious process of getting rid of bad hires. Most managers are not going that path unless they are forced to.

Re: Microsoft to lay off 11k employees

#49

Post by throwawaysleep »

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 '…

It boggles my mind that people will work hard for an employer. You care about you less than a used napkin.
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