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Microsoft to lay off 11k employees

reuters.com

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Re: Microsoft to lay off 11k employees

#91

Post by brightball »

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?

I think he's suggesting that they want to do periodic layoffs regardless but that there may be a more negative perception of doing so in isolation rather than the current situation of multiple other big tech companies doing it.

Re: Microsoft to lay off 11k employees

#92

Post by kmonsen »

cscurmudgeon wrote: post #39
rodgerd wrote: post #33

Earlier quoted context omitted.

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.

I think the overall spirit of your argument is true, but I think you define brilliance too narrowly with saying it primarily applies to mathematicians.

Re: Microsoft to lay off 11k employees

#93

Post by SkyPuncher »

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…

IMO, cheap capital meant companies could take "dumb" risks. Now that interest rates are going up, they need more plausible returns on investment.

Re: Microsoft to lay off 11k employees

#94

Post by foogazi »

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.

We don’t do it expecting love in return - we get a paycheck every two weeks

Re: Microsoft to lay off 11k employees

#95

Post by ProAm »

Jemm wrote: post #74

Using employees as a profit buffer. Just another shitty way corporations work. Somebody got a bonus for making this suggestion at Microsoft.

Im not sure I follow your thought process. Are you suggesting these employees would make Microsoft more profit YoY than laying them off when they are deemed as a cost center vs profit center?

Re: Microsoft to lay off 11k employees

#97

Post by mgkimsal »

KallDrexx wrote: post #88
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 '…

> MSFT currently have $100b cash on hand. Fwiw, unless cash on hand already accounts for it (I don't think it does), then $70B of that is tied up in the Activision acquisition. Thus we really only have $30B cash on hand, which in a higher than previous interest rate environment is probably not great (though afaict Apple has $48B). Likewise, our cash on hand has been drastically dwindling the last few years, making th…

I had seen someplace else that there's... $107b as of last quarter, but it was down 17% from year before same quarter, so yeah, it's draining some. But are they really putting $70b down in cash for Activision?

Re: Microsoft to lay off 11k employees

#98

Post by chrisco255 »

pyrrhotech wrote: post #68
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. Addit…

I would think the figure of public companies gone bankrupt to be much much higher over that long of a time frame.

Re: Microsoft to lay off 11k employees

#99

Post by jstummbillig »

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?

What I took from it – and I think they might be on to something – is that it's opportunistic firing.

Firing people at this scale would have been pretty expensive just a few month back, PR wise. Right now, a lot less so. So you might be tempted to think of the current climate as a good opportunity to shed some fat, to the point where you go into it with the idea of hiring back right away and being able to do so at better conditions. The market has relaxed.

Compare it to a few month back, where switching jobs (= firing your employer) was a great way to automagically increase your pay. It works both ways.

Re: Microsoft to lay off 11k employees

#100

Post by bagacrap »

endsync wrote: post #78

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 cri…

Is this a war on talent, or just free market dynamics?
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