Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Microsoft to lay off 11k employees

reuters.com

Post reply on HN
Print view View original

61–70 of 481 posts

Re: Microsoft to lay off 11k employees

#61

Post by SilverBirch »

qeternity wrote: post #44
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?

The point is that yesterday, they did want/need these people. To make a broader point, when money was cheap all the tech companies expanded to use cheap money to make bets that would grow their revenue. Some of these were speculative, some of these were ill thought out. In the same way that some companies started stupid projects during the cheap money era (meta, I'm looking at you), there will be companies that cut good projects now that the markets are demanding efficiency. The ideal company doesn't start doing stupid stuff during the cheap money era, and continue to invest when rates go up, safe in the knowledge they're confident that their bets will pay off. The problem is CEOs are following the market, rather than making real decisions for themselves, which kind of makes you wonder... weren't they meant to be getting paid 399x the wage of the average employee because they're the best and the brightest, not just following the crowd. But they aren't the best and brightest and they are just following the crowd - which is why they're going to fire a load of people, because we pay them because the buck stops with them. And by them, I mean them firing us.

Re: Microsoft to lay off 11k employees

#62

Post by 98codes »

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 '…

The linked article gives no more information than "Sky news reported this, citing sources."

Microsoft employs a wide variety of people, not just developers, and a lot of those jobs aren't making nearly as much as $250k/yr, nor are they so easily rehired into a job somewhere else.

Re: Microsoft to lay off 11k employees

#63

Post by guessbest »

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?

I think that some companies buy up all available talent to deny their competitors hiring pool.

Re: Microsoft to lay off 11k employees

#64

Post by matusp »

estebank wrote: post #58
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…

> seeming negligible external-facing impact on the core product In both technical and product axes Twitter has already deteriorated massively, possibly beyond repair and the company might not make it to 2024, so I wouldn't call that "negligible".

In what regards has it deteriorated so much?

Re: Microsoft to lay off 11k employees

#65

Post by gowld »

ethbr0 wrote: post #42
CobrastanJorji wrote: post #31

Earlier quoted context omitted.

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.

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

Why?

If you are so good at identifying poor performers, fire them, and reap the profits of being leaner, more effective organization.

"The market" is a boogeyman used to rationalized everything.

Re: Microsoft to lay off 11k employees

#66

Post by chefandy »

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 '…

Unless they're laying off 11,000 developers and managers the loaded average is probably even less.

Re: Microsoft to lay off 11k employees

#67

Post by estebank »

anonporridge wrote: post #52
MuffinFlavored wrote: post #41

Earlier quoted context omitted.

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.

Yeah, 5% is a small, manageable number. Small enough that if you find you accidentally cut important people or roles, you can quickly get them back. The point in my second paragraph is that if the company actually needs a 15% layoff to maintain itself long term, it would be safest to do it in three smaller 5% waves rather than one fell swoop. After each layoff, you let the system settle and recover, making sure that…

> it would be safest to do it in three smaller 5% waves rather than one fell swoop

This disregards the effect of repeated layoffs on the morale and mental health of human beings, which affects how "the system" settles and recovers.

Re: Microsoft to lay off 11k employees

#68

Post by pyrrhotech »

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's silly to mention the cash on the balance sheet without also mentioning the debt of $77B. In reality, the net cash position is on the order of magnitude of $30B which puts a much tighter perspective on the impact of this cut. 40% of all public companies created since market inception in 1871 have gone bankrupt including many of the bluest of the blue chips. Complacent thinking like this is often the reason. Additionally, if you've ever worked at a large company, you can see first hand at how much bloat there is.

Re: Microsoft to lay off 11k employees

#69

Post by qeternity »

bink wrote: post #53
qeternity wrote: post #44

Earlier quoted context omitted.

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

Normally, hiring 11,000 people you "didn't need" would be a warning sign that management was incompetent and require much more than just laying off the unneeded workers. It would suggest that large reforms are needed in planning and hiring. But these days it's just dismissed as an "oops!".

They clearly did need/want them at some point. And then things change.

“When the facts change, I change my mind. What do you do?”

Re: Microsoft to lay off 11k employees

#70

Post by t-writescode »

gowld wrote: post #59
anonporridge wrote: post #24

Earlier quoted context omitted.

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…

Why? What's wrong with firing people during other economic conditions? Why would the paperwork be any different, whether it's a small layoff or a big payoff? Ctrl-C/Ctrl-V is cheap, Microsoft implemented it many times in many products.

Humans fire other humans. Layoffs allow for severance and unemployment, which can make the pain of firing someone and all the externalities that come with it far easier for a boss to swallow.
Post reply on HN