Surprisingly no mention of AI in an article about mass layoffs at a tech company. Wonder if that line has finally had all the juice squeezed from it to explain away layoffs and outsourcing.
Xbox has really become a sore point in the MS portfolio. Their pivot to a marketplace model where their games run everywhere is an admission that they lost the race to Sony. Block buster acquisition like Activision further have exacerbated their conundrum.
What Xbox is now can be done by a much smaller number of people.
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).
I think you are highlighting the truly important bit here - that megacorporations are economy's cancer. I am on the side that work is work, there should be no emotional connection, except for the personal relationships. It is fine that companies hire when they need resources and fire when they don't. However, a small company might lay off 10 people and they will quickly disperse in the available work pool. However, laying off 30k people at once does serious damage to the market and the prospects of those laid off people.
1. Over hiring isn't really a thing here. They knew what they were doing and knew they could just kick people out if things changed. I don't like that term to describe the situation.
2. That's how it is for most of these high profile layoffs. They are profitable but do layoffs so they can report record revenue later. It's not about "we can't afford workers", it's about blatant greed in 90% of cases this decade.
3. Yeah, talent retention is gone this decade. They don't care about growth or fostering future labor.
This is the future for all tech companies. Tech workers in the US are the modern day factory workers. Offshore skill set rise plus AI means the end of US tech jobs in the next decade just like it meant the end of US factory work in the 90's.
Everyone in tech thinks they are special but companies will always do what they can to reduce costs and tech salaries are some of the biggest costs companies have. They're going to do everything in their power to reduce them.
These recent Microsoft layoffs make no sense. Hitting all across the organization, performance, and tenure levels with no real pattern. Are the layoffs going to continue until moral improves or what?
I don’t remember when it became normalized for profitable companies to casually execute major layoffs. It used to be a “shameful” last resort that CEOs turned to as a last ditch effort to save a company facing bankruptcy.
I suspect it’s related to the stock buyback safe harbor rule (Rule 10b-18.) Layoff announcements used to be a sign of a company in crisis, now the stock price often immediately rises, perhaps because shareholders are anticipating a short-term windfall.
Microsoft's most recent quarterly numbers, for those interested:
- Revenue was $69.6 billion and increased 12%
- Operating income was $31.7 billion and increased 17% (up 16% in constant currency)
- Net income was $24.1 billion and increased 10%
How can you justify needing layoffs when you made $24B in net income on $70B in revenue?? I guess $24B and a 10% YoY increase is almost failing?
This appears to be sales and marketing layoffs. If AI is worth its salt, theoretically the sales and marketing people should be able to prompt they way into grabbing Microsoft's market.
Earlier in my career I worked for a tech industry-famous CEO who is long retired.
One of the most unconventional things he taught me was that “our highest obligation is to employees and their families. Second is to investors. Third is to the communities we operate in. Obviously don’t ever say this in a board meeting or investor conference”.
And he meant it. When products got cancelled, people got reassigned. Terminations for poor performance happened but were individual cases.
I’m quite sure the idea of firing people to goose the share price never even crossed his mind.
I do wonder if these trends continue (paired with the offshoring and H1B replacements they're all in on (otherwise mentioned in this thread), how this effects the local housing markets in places like, in this case, Seattle.
If every third 22 year old isn't making 200K, how are you going to sustain a market of crapshacks "worth" 1M?
Meanwhile my buddy at Microsoft working on AI tools to "increase employee and engineer productivity" just started ramping up sharing job postings for their department.
Various unions of factory workers said the same thing in the 90's, and they had unions. If anything this is not going to change, only accelerate. History is repeating itself but tech workers are just the new factory workers.
Given I’ve been trying to use some of Microsoft’s various productivity SaaS tools for a new job lately, and well, they need those workers.
Teams is sort of tolerable now, but still feels terrible and lacks many of slacks niceties. The rest of their productivity stuff is terrible and slow. It’s embarrassing really.
From what I read Azure is a border line dumpster fire.
Then what LLM integration do they really have in their software apps?
This is how I don't get when some predict that we'll have a shorter working week when AI improves productivity. If productivity gains are 50% the companies would rather have 50% lesser employees rather than 50% shorter work weeks.
Or have the same work week and employee size and get twice the amount of work done for the same cost. It's never going to benefit the workers in any case.
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[ 313 ms ] story [ 1224 ms ] thread2. That's how it is for most of these high profile layoffs. They are profitable but do layoffs so they can report record revenue later. It's not about "we can't afford workers", it's about blatant greed in 90% of cases this decade.
3. Yeah, talent retention is gone this decade. They don't care about growth or fostering future labor.
1 - Microsoft investing 3bn USD in India-based developers: https://www.reuters.com/technology/microsoft-invest-3-bln-ex...
2 - Microsoft having 4700 H1B filings for fiscal 2025: https://www.myvisajobs.com/employer/microsoft/
Utterly predictable behavior by Satya Nadella.
Everyone in tech thinks they are special but companies will always do what they can to reduce costs and tech salaries are some of the biggest costs companies have. They're going to do everything in their power to reduce them.
I suspect it’s related to the stock buyback safe harbor rule (Rule 10b-18.) Layoff announcements used to be a sign of a company in crisis, now the stock price often immediately rises, perhaps because shareholders are anticipating a short-term windfall.
Cut costs and make 25B next quarter! Cut more in US and hire in India. Make 27B in a quarter next year!
One of the most unconventional things he taught me was that “our highest obligation is to employees and their families. Second is to investors. Third is to the communities we operate in. Obviously don’t ever say this in a board meeting or investor conference”.
And he meant it. When products got cancelled, people got reassigned. Terminations for poor performance happened but were individual cases.
I’m quite sure the idea of firing people to goose the share price never even crossed his mind.
If every third 22 year old isn't making 200K, how are you going to sustain a market of crapshacks "worth" 1M?
Sounds like a Monopoly. Why bother building something new?
Teams is sort of tolerable now, but still feels terrible and lacks many of slacks niceties. The rest of their productivity stuff is terrible and slow. It’s embarrassing really.
From what I read Azure is a border line dumpster fire.
Then what LLM integration do they really have in their software apps?
meanwhile revenue is up 15% YOY