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Microsoft to lay off 11k employees

reuters.com

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Re: Microsoft to lay off 11k employees

#71

Post by phillipcarter »

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".

> so I wouldn't call that "negligible".

I think the mistake you're making here is assuming that your average tech CEO is paying attention to the same degree you are. They aren't. They don't have time to notice all the many little things that degraded already, they just saw that the site didn't go down a week later and moved on.

Re: Microsoft to lay off 11k employees

#72

Post by bagacrap »

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…

> it's probably reasonable to assume their shareholders are enjoying a robust, growing business

I don't know what you mean by enjoy here, but shareholders generally enjoy it when stock price appreciates, which is not what's been happening the last 12-14 months.

Re: Microsoft to lay off 11k employees

#73

Post by dragontamer »

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…

> with seeming negligible external-facing impact on the core product.

Twitter is said to have lost $2.5 Billion/year in advertiser money, largely because Twitter's sales teams have not been returning emails from worried Advertisers. That's a pretty huge impact on Twitter's #1 revenue stream (estimated to be $5 Billion in 2021).

Twitter's core product is advertisements. Without sales staff to keep the advertisers, they're clearly losing a ton of money.

Advertising was always degenerating. I know that over the past year, I've been seeing more and more pornographic material in Twitter, and I'm pretty sure advertisers don't like that kind of stuff. But instead of having teams working out those kinks (pun intended), those teams have been simply fired.

So advertisers know that there's no hope for these issues to be fixed anymore, and are now leaving the platform. There's simply not enough developers left to change Twitter or combat the rise of unsavory material.

---------

There's been many a blogpost about "Airline advertiser didn't want to have its ads appear next to Airline disasters". (Ex: Southwest's shutdowns cause thousands of flight cancellations, it will be talked about on Twitter... does Southwest want its advertisements being shown next to that??).

These are the kinds of things that Twitter's teams worked to prevent. You know, mundane issues but require _constant_ coding to identify as news events cause a rapid change to the online discussion. And its fair: there's no reason why Southwest's advertisements should be shown in a negative light... or for Southwest to be paying for that kind of negative publicity.

Re: Microsoft to lay off 11k employees

#75

Post by mgkimsal »

98codes wrote: post #62
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.

I added an edit to round down. Again, I used $250k as a loaded cost - benefits, stock options, IRA matching, etc. Someone on $125k year might still 'cost' an extra $40k, and ... the $250k was possibly on the high side - round down to... $200k, and the argument is now... $2b/year instead of $3b. And yeah, many of these folks may have a harder time finding an equivalent paying engagement (perhaps you'll have to move? hard on people with families, etc).

Re: Microsoft to lay off 11k employees

#76

Post by spicymaki »

throwawaysleep wrote: post #49
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.

I work hard for myself not some employment ideal.

Re: Microsoft to lay off 11k employees

#77

Post by dakiol »

rufusroflpunch wrote: post #56
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…

What are you getting at, exactly? Are you implying they don't need to fire these people, they just want to? Or are you saying they think they need it, but they really don't?

Isn't it obvious? They don't need to fire those people.

Re: Microsoft to lay off 11k employees

#78

Post by endsync »

Bloat is real, but there's another labor market dynamic in play here.

There was a huge run-up in corporate employee compensation in the tech sector over the last few years. (Some called it a "shortage," remember. Some of it is genuine growth in the sector, some of it was definitely "labor hoarding" by large companies that could afford to carry excess staff in a tight market as a hedge against being unable to fill critical roles - or to deny talent to competitors.)

While I would be surprised to learn of explicit collusion to suppress wages (unlike the _In re: High-Tech Employee Antitrust Litigation_ case,) collusion is not needed. The more tech employers lay people off, the more incentive there is for the next large tech employer to announce a layoff, and that's discoverable without collusion. In the aggregate, the benefit to flooding the market to reduce employee bargaining power offsets potential loss of critical talent, because it drives down the cost of acquiring new talent.

The "war for talent" quickly turns to the "war on talent."

Re: Microsoft to lay off 11k employees

#79

Post by burnished »

rufusroflpunch wrote: post #56
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…

What are you getting at, exactly? Are you implying they don't need to fire these people, they just want to? Or are you saying they think they need it, but they really don't?

The phrase "hard time teasing out" typically implies that the author doesn't know what to think amidst several options.

Re: Microsoft to lay off 11k employees

#80

Post by jimbok »

Just last week MSFT nixed the accrual PTO benefit employees enjoyed and opted for the rouse of 'unlimited' PTO. Effectively, ending a liability/cash outlay they would pay when folks quit, or get fired. I hope those who were affected today receive severance that makes up for them losing this benefit.

-James

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