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Microsoft to Cut 9k Workers in Second Wave of Major Layoffs

(www.bloomberg.com)
209 points htrp | 16 comments | 02 Jul 25 13:26 UTC | HN request time: 1.075s | source | bottom
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idkwhattocallme ◴[02 Jul 25 15:02 UTC] No.44444622[source]▶
For the most part, I'm indifferent to layoffs. Companies over hire and then course correct. It's part of the game. But for MSFT, it rubs me the wrong way. In the past 5 years, their stock has soared (150% on stock and doubled in valuation). They are insanely profitable ($82B profit). They are diverse (no existential business risk). The fact that they are unceremoniously laying off 30K of the people that helped them get there drives home it's just a paycheck, do your job, but know it can and will end when convenient for the company. I know folks will argue, low performers, but really. This "productivity apps" company hired them, onboarded them, made $82B in profit, surely they can figure out how to uplevel folks. Also how do you have a layoff every couple of months for 3 years. Thinking about the middle class in the previous generation, it was unions that effectively ensured a labor job meant a secure future. I wonder if that's the solution (again).
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1. runjake ◴[02 Jul 25 15:08 UTC] No.44444692[source]▶
Didn't Satya or somebody state in recent months that it was a tactic to get rid of low performers? I believe Meta is doing something similar.

Edit: Allegedly not.

https://www.financialexpress.com/life/technology-microsoft-c...

"Nadella addressed the recent layoffs, clarifying that the decision was not based on individual job performance. “This is a structural change, not a reflection of how people were performing,” Nadella explained. He emphasized that Microsoft is shifting its strategic focus, with a renewed emphasis on artificial intelligence (AI), which the company views as a key driver of its long-term vision and growth."

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2. atomicnumber3 ◴[02 Jul 25 15:15 UTC] No.44444757[source]▶
Also, if it were actually about "low performers", this wouldn't be in the news. They'd just be terminated during/before perf review.
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3. daxfohl ◴[02 Jul 25 15:32 UTC] No.44444978[source]▶
Shifting focus is not narrowing focus. They should be able to shift employees accordingly too.
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4. dragonwriter ◴[02 Jul 25 15:43 UTC] No.44445125[source]▶
There's an economic slowdown without relaxing the monetary tightening (because inflation, while relatively mild, is still above target.)

Further cutbacks from the level reached by the prior cutbacks due to monetary tightening when the economy was still in robust growth are to be expected, as are relatively transparent rationalizations that try to put an upbeat spin on them instead of the honest “the cost of money has gone up and the return of spending it on higher staffing levels has gone down.”

5. belter ◴[02 Jul 25 16:15 UTC] No.44445520[source]▶
AI is the convenient scapegoat. Companies frame mass layoffs as a strategic shift toward AI to boost margins and excite investors, but in reality, it signals a deeper business crisis. Not one of these 9,000 jobs will be meaningfully replaced by AI anytime soon.
6. 0cf8612b2e1e ◴[02 Jul 25 16:15 UTC] No.44445521[source]▶
Eh, it can take a lot of political willpower to actually get rid of a low performer. We had an infamous case where it took two years to finally kick some deadweight to the curb. Wanted multiple years of underperforming performance reviews, I guess. Despite what some may claim about market efficiency, this is a public, wildly profitable company, not government.

Unfortunately, I have never seen a layoff only remove weak people. Plenty of good gets thrown out with the bad every single time. The only signal I take from someone being laid off is that they were unlucky and probably not a total sycophant.

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7. darth_avocado ◴[02 Jul 25 16:25 UTC] No.44445636[source]▶
If you have a large sales team for products that are not selling, and you want to invest in building a brand new product, you are not going to be able to move the sales folks into R&D. If you end up building the new product, you may eventually need the sales team, but most businesses in the meantime would reduce the headcount in sales instead of retaining them. I’m not saying that not bad for employees, but shifting focus isn’t always about changing what employees work on.
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8. daxfohl ◴[02 Jul 25 16:35 UTC] No.44445745{3}[source]▶
True. I didn't get to the fact that it was sales due to pay wall.
9. butlike ◴[02 Jul 25 17:11 UTC] No.44446235{3}[source]▶
Think of it more as a "controlled burn wildfire," you want to clear land to let new foliage grow. Same with companies; you clear out some space and see what ideas flourish with the new crop
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10. runjake ◴[02 Jul 25 17:58 UTC] No.44446831{3}[source]▶
We had a case where it took 10 years to cut 3 FTE deadweights and it only happened because of the 2008 Crash and consequential tightening of money flow.
11. pjmlp ◴[02 Jul 25 17:59 UTC] No.44446853[source]▶
Somehow on places like HN, people aren't worthy of a job, it is the inverse of Peter Principle, keep firing the low performers until they land a job where they manage not to get fired.
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12. const_cast ◴[02 Jul 25 20:24 UTC] No.44448416{4}[source]▶
Or, more likely, leadership is sloppy and lazy. They make mistakes and color outside the lines, and they pay for it. The hope is that they don't hurt themselves too bad.

Luckily for leadership, opportunity cost is completely invisible. They can't travel to alternate realities so they can just pretend they made a good decision and go with that. This is what causes the fun phenomena of "failing upwards" we see in modern American corporate leadership.

13. atomicnumber3 ◴[02 Jul 25 20:55 UTC] No.44448711{3}[source]▶
That's literally how capitalism determines wages, yes. I too have critiques of capitalism. But I often refrain from enumerating them on every single comment that relates to labor because otherwise we never get to actually discuss labor in its current context.
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14. pjmlp ◴[03 Jul 25 05:08 UTC] No.44451804{4}[source]▶
Fortunately there are other ways to determine wages.

Not every society expects people to achieve maximal performace on quarterly OKR, while management foreman's play rythmic cadence drums and whip slashes.

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15. atomicnumber3 ◴[03 Jul 25 21:24 UTC] No.44459321{5}[source]▶
Ok sure, dude I am with you, I am a socialist. But this doesn't help us navigate the existing system we have to work in until we can finally establish a truly socialist society.
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16. pjmlp ◴[05 Jul 25 10:03 UTC] No.44471534{6}[source]▶
It is a matter who we chose to vote on, the unions we empower, the fight for sensible work protection laws.

Then again, European socialism is already too left for US capitalism mindset.