'Microsoft's Constant Layoffs Risk Creating a Culture of Fear' (theverge.com) 73
An anonymous reader shares a column: I can't open LinkedIn without seeing a new post from a Microsoft employee who lost their job in the company's latest round of layoffs. Around 15,000 jobs have been eliminated at Microsoft over the past couple months -- the biggest cuts at the company in more than a decade.
I've spoken to more than a dozen Microsoft employees in recent weeks, and everyone is concerned about the company's direction in this AI era. Morale is at an all-time low, and employees are worried that regular layoffs are simply the new normal.
Sources tell me that Microsoft's leadership team had the choice between reducing investment in AI infrastructure for the upcoming financial year or deeply cutting its headcount and operating expenses. It's very clear what route Microsoft chose.
I've spoken to more than a dozen Microsoft employees in recent weeks, and everyone is concerned about the company's direction in this AI era. Morale is at an all-time low, and employees are worried that regular layoffs are simply the new normal.
Sources tell me that Microsoft's leadership team had the choice between reducing investment in AI infrastructure for the upcoming financial year or deeply cutting its headcount and operating expenses. It's very clear what route Microsoft chose.
"risk creating" (Score:2)
I hear the culture of fear is very real, and additionally has created a pretty uncooperative, hostile environment as everyone hoards knowledge. How about trimming executive salaries a lot? They're clearly worthless.
Re:"risk creating" (Score:5, Interesting)
The way it played out was that every area had to find a bottom 10% even if everyone on their team were rockstar contributors. So if team A was all rockstars and team B were all less-good engineers guess what? Instead of cutting only from team B and transferring a rockstar over they would cut a rockstar and a less-good engineer at the same time. Everyone saw it.
Eventually the rockstar employees stopped helping the new guys because they didn't want to enable someone leveling up and them getting cut. A lot of people left to get away from it. And, at the end of the day most of management was populated by even worse jerks because they were the ones who had gleefully stepped on anyone in their way in order to not be considered bottom 10% material.
It took almost a decade after that policy ended for the culture to really turn around. And, that involved cutting th ranks of middle management populated with those jerks who had survived/thrived from the bottom 10% policy.
Re:"risk creating" (Score:5, Interesting)
From what I have read and heard anecdotally from others, what you are describing is not a one-off. There are several businesses that take this approach, and (from what I gather) it tends to be most popular in sales departments.
I have also read about a related philosophy that "if you aren't actively trying to be promoted, then it is time for you to be dismissed." The theory is that any employee who is comfortable at their current level won't be giving that extra mile to try to be promoted, so they are not worth as much as one who is still aggressively competing for the top spot.
These philosophies sound absolutely ghastly to ordinary people. We imagine a company as something of a "big team" all working together towards a common goal, and our efforts are optimized if we freely support each other, knowing that helping out a co-worker benefits the greater good.
Well, there are real people in the world who get high marks on the dark triad [wikipedia.org] of personality traits. They naturally see the world differently than we do, and (just as naturally) tend to assume that most other people do to. From their perspective, crushing others is THE path to success in any domain. So, not only do THEY excel in stomping others underfoot, but they expect that everyone else should too. They imagine a company in which everyone is competing against everyone else is a company in which productivity is maximized. And, it certainly feels proper to them that everyone would be pulling no punches in their efforts at impressing upper management. So, they LIKE the very hostility that we distain, and think it is good and healthy for the company to be like that.
I don't think any amount of dialogue or research will change their minds. They see things like generosity as nothing more than weakness to be exploited, and so they do.
What's really sad is....this works well enough that most companies wind up being led by such people. That is the hardest part of all of this to except. At least to some degree in some context, it has merit. The dark triads win.
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Salesfolk sure bring things into being, tho (Score:2)
Something like:
"I promised $MassiveClient a telepathic interface by Tuesday. Bob, you mentioned that a while back, how's it going?"
Re:"risk creating" (Score:5, Interesting)
Later on he made the very big mistake of blaming an admin for various things, claiming she never sent him things or she must've lost his response. He finally learned not to lie about an admin to the vp she supports because he was fired. A good admin is far closer and tighter with the vp they support than any subordinate to that vp.
That single bad manager caused at least seven good people I knew to quit the company and never look back. Taking all their knowledge and experience with them. The project ultimately succeeded. And, I did not get run over by the bus. Partly because that same admin was a friend of mine and I'm sure she relayed to the vp the whole incident about the spreadsheet.
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Wow, that's amazing.
I suppose the Dark Triad only gets you so far by itself. At some point you must back it up with competence, or you will make blunders like that guy did and out you go.
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"if you aren't actively trying to be promoted, then it is time for you to be dismissed."
I often see that attitude with some I work with. They are literally flabbergasted that some people may both do an excellent job and also be happy and satisfied with their current role. Not everyone wants to get promoted. Everyone likes and would take more money, but that doesn't mean they are willing to do anything at all costs to get it. Many resists management because they don't want to have to deal with other people,
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From what I have read and heard anecdotally from others, what you are describing is not a one-off. There are several businesses that take this approach, and (from what I gather) it tends to be most popular in sales departments.
It's called Stack Ranking and it causes problems when people need to cooperate (like on programming teams), because people won't cooperate, they'll backstab each other. It's entirely counterproductive.
It works ok on sales teams when salespeople operate independently of each other. (ie, the more they work together, the less it works).
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I hear the culture of fear is very real, and additionally has created a pretty uncooperative, hostile environment as everyone hoards knowledge. How about trimming executive salaries a lot? They're clearly worthless.
Another option is cutting back on $20-30 billion in share buybacks every year. Even cutting 15,000 employees saves just a small portion of the cost of the share buybacks. And the share buybacks constitute less than 1% of the total market capitalization, so they don't really have much of an effect on the share price. What's more baffling is that if the buyback money were instead spent on increased dividends, the current dividends could be doubled, and that potentially would increase the share price more t
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I hear the culture of fear is very real, and additionally has created a pretty uncooperative, hostile environment as everyone hoards knowledge. How about trimming executive salaries a lot? They're clearly worthless.
Another option is cutting back on $20-30 billion in share buybacks every year. Even cutting 15,000 employees saves just a small portion of the cost of the share buybacks. And the share buybacks constitute less than 1% of the total market capitalization, so they don't really have much of an effect on the share price. What's more baffling is that if the buyback money were instead spent on increased dividends, the current dividends could be doubled, and that potentially would increase the share price more than the buybacks.
The real problem is that the executives don't have common sense. Investing gobs of money in a future technology like AI. That's a risky bet, but at least one that is understandable. Buybacks are just throwing someone else's money at something that is known to not make a difference. Executives do the buybacks because it's not their money. Getting rid of employees does decrease operating expenses and increase efficiency, but that assumes that the executives know who to cut, which, of course, is unlikely given that the same executives hired these people in the first place.
It's strange that they don't separate investment in AI vs operating expenses in the rest of the company to keep and expand the markets they have. It's not like they're financially unable to do both - both AI and keeping the resources they need for operations(*). That said, buybacks are better for some than dividends because you pay taxes immediately on dividends while if the same money goes via buybacks you don't have to pay taxes before you realize the profits by selling the stock. Of course, if like most
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Share buybacks are just a tax efficient version of dividends. They both return money to the shareholders. Buybacks as unrealised capital gains. Dividends as income.
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Except when share buybacks are financed by debt (issuing even more shares).
Ruling class (Score:4, Interesting)
You are taught during a critical time in your learning process that America does not have a ruling class. This is a lie but because it's taught you during the 4 to 14 window it's basically impossible to get it out of most people's brains.
If you do manage to get the idea out of your brain then the whole world makes so much more sense.
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Re: Ruling class (Score:1)
That happens more often than you think, you just rarely hear about it. And often if the company is struggling financially, the executives are hit the hardest, seeing their net worth drop by millions if not billions.
https://fortune.com/2025/07/17... [fortune.com]
I still remember when I got laid off ten years ago, the CEO was tossed I think about 4 months later. Good guy, I met him in person a few times as he'd sometimes have lunch with us, but the company just wasn't doing well under his watch.
Anyways, we don't need your
With all due respect (Score:2)
And those numbers get a hell of a lot worse when you take into account billionaires.
This is before we talk about nepo babies and contacts and networking that you get to do when you're a member of the ruling class. The ruling elite have class solidarity while anyone that really works for a livi
Re: With all due respect (Score:1)
What the hell are you talking about? If my net worth is $100 million and it drops by 90% I'm still filthy stinking rich and will never have to work again unless I blow through the money on extravagant spending.
Not all of them spend that extravagantly. Your personal favorite, Elon Musk, doesn't even live in an expensive house, or drive exotic cars, or anything like that.
And those numbers get a hell of a lot worse when you take into account billionaires.
I get that you have this image of them swimming around in a money bank like Scrooge McDuck because this is just the way you picture the world, but in reality that kind of money only exists on a ledger somewhere, and there isn't enough physical or even electronic money in the world to pay for 90% of it. They just have a large ownership stake in some
Culture of Fear (Score:2)
Seems micro$oft like many/all large corporations on this planet strive towards a "Culture of Fear" to keep their minions in line.
Of course they hire PR firms to extol their virtue but you can only be fooled about their true nature for so long.
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It's a very short-sighted strategy.
Employees are a money making machine, you feed money into payroll and you get work of more value out of it. Apply that work to your business goal and that's profit. Assuming you have the machine tuned up and running properly. (that's always the rub, isn't it)
Re: Culture of Fear (Score:3)
I think Microsoft is a victim of industry hype that it itself is a contributor to. I'm still in the "wait and see camp" for AI, but right now this looks like a classic gold rush scenario, and so far the only ones who have made money (and a lot of it at that) are the guys selling shovels and pickaxes.
I think the vast majority of the money being spent on this will never see any meaningful ROI. You'll probably end up in an economic rule of three scenario, with the third basically breaking even, and the rest tr
Re:Culture of Fear (Score:4, Interesting)
It sounds like working at 2025 Microsoft is a lot like working at 2005 IBM. You're now always in danger of losing your job in the annual cost cutting layoff, or maybe even a special bonus layoff if the company didn't meet the quarterly numbers.
Of course, back then, they were just outsourcing jobs overseas. Now they're saying that they're going to replace your job with AI, but odds are that they'll also replace you with an overseas resource if the AI thing doesn't work out.
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Re: Culture of Fear (Score:2)
The overseas resource thing didn't really work out. They work well for situations where you need to quickly staff a new in-house business unit while you mature it, or when you have a short term project that's too big for your own internal resources to build from scratch, or some other acute need, but they don't work well long-term.
Eventually a lot of those guys got jobs at IT support scam companies.
Decent chance we'll see something similar with AI tools.
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Re: Culture of Fear (Score:2)
You mean like you do with collies?
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Re: Culture of Fear (Score:2)
You're obviously not playing the right game.
tough to plan your career or retirement (Score:3)
It's tough to make plans when you are never sure if you'll get cut. It makes people not want to take vacations or spend too much time with their family.
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It's different than my job at my current company. I don't think I'm going to get fired. And I recently asked for time off after finishing a tough release.
My company has zero layoffs as a KPI that the CEO and board committed to shortly after some very difficult layoffs 15+ years ago.
It flip side means it is difficult to get hiring reqs approved and the interview process is long. And the recruiting department is short staffed, so candidates don't get regular updates on the interview process. A lot of them dro
no shit (Score:3, Interesting)
Seems like one of those articles that asserts that something could happen, which has obviously already happened, just so that the reporter doesn't have to do as much work to prove it.
Normally a company that engages in layoffs again and again is one on a death spiral. Like, if you only have $50 million in the bank, you have no choice, you MUST cut costs so you don't run out of money. That, in turn, hurts the business, so you have to lay off people again and again. This continues until the company is bought out -- and smart employees recognize the situation and leave.
Microsoft has $80 billion in the bank, it can make whatever investments it wants without laying people off. Except then Satya and Amy would not get their bonuses for hitting financial targets. This is the kind of short-term, idiotic thinking that happens when founders leave. Bill or even Steve would have taken a longer term view since they did not depend on quarterly bonuses to make their fortune. By the way, these idiots squandered a massive amount of money on Activision which they are now hacking to pieces, they had used that deal as a last-ditch effort to save Xbox. If they hadn't done that they'd have plenty more money to spend on AI.
Anyway it amounts to the same thing. Why would anyone stay at MSFT? It's not for the free food (there isn't any) or the immense personal satisfaction of working on Microsoft Dynamics or some other piece of shit. Azure was a good place to be, and is the current engine of the company's earnings, but they've done layoffs there as well!
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So what does this have to do with the executives? They are doing what board told them to do. If board told them "we need to cash out immediately because a financial crash is coming", that's what happens. It's not like only Microsoft is affected by this.
it's not the board's decision (Score:1)
Layoffs are Microsoft are done at the P&L-holder level. If you're a CVP, and you have a P&L, you have the discretion to lay people off so that you meet your budget. It can go above the bottom level P&L as well, like if Amy Hood tells you that you need to cut $10 million in comp in your organization, that means you need to do layoffs.
In general, at a company, the board will give input at quarterly board meetings (e.g., if the sales team says, we're going to jack up prices 5% the board might say,
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I get that part, it's always worked this way. But using layoffs to meet targets only really started a couple of years ago (at least in this cycle), and it wasn’t just Microsoft -- it happened across the IT sector. The recent advances in AI alone don't explain the scale of these layoffs. The only explanation that makes sense to me is that shareholders have become more demanding. They may not micromanage layoffs directly, but they can easily look at some metrics and say, "Looks like there’s too mu
Re: They are always laying off the "bottom" tier (Score:1)
MS layoffs are a good thing (Score:2)
Maybe they'll get rid of the people making unwanted and forced Windows updates and just focus on stability for other revenue generating products.
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Funny! Those are the kept ones. The greed is strong in those halls.
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Please keep Poettering. We don't want him back as a Linux dev.
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Yeah, I'm not sure how Microsoft profits off of forcing you to reboot your computer to install updates.
I do understand how making Onedrive sync terrible improves their profits, though. By making it back up a bunch of worthless temporary files, they're upping your cloud storage requirements. Most people probably never bother to check what crap it's backing up, and just pay extra for the additional storage.
Welcome... (Score:2)
Funny time? (Score:1)
Story seems to be a rich target, but I always fail in attempted humor...
Question: How many Microsoft employees does it take to upgrade a light bulb?
Answer: What's a light bulb?
Yep (Score:2)
Payback for working from home and demanding better wages.
So (Score:1)
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What do you mean? The chocolate ration has always been 8oz.
Profit growth today.. (Score:2)
DOGE them all (Score:1)
Incompetence and Crap... it's Microsoft. (Score:5, Interesting)
1. #1 in terrible customer service, leading the way to new level of incompetence.
2. Incompetent and broken licensing, across their stacks.
3. Convoluted and confusing patchwork of bad software.
4. Thieves, intentionally selling you the wrong tools so you have to upgrade later.
5. Lack of compatibility.
6. Terrible operating system, that crashes more than it works.
7. Terrible communication software, cans which have a string between them, where one can fell off, is better than Teams.
8. Snakes, giving out bad advice, and lying, to their community forums.
I can keep going, but it will be a while before I have anything good to say. Microsoft isn't risking a reputation of fear and risk, they can't get to fear and risk. When you hear the name "Microsoft", it's like hearing about that product you, or someone you know bought, that was so bad at its job, it was hilariously broken, then lame, then annoying, then infuriating. Most large companies have a public face that is less than pleasant or joy bringing. Maybe somewhere between freshly cleaned, and sanitized dumper, through to dumper fire at a homeless camp. Microsoft's is more: Exploded diaper pail, which had never been emptied that spray shit everywhere, well trying to claim that shit was rain, which they blame on AI well customer service tried to explain this was the proper way to run a day care.
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Re:Incompetence and Crap... it's Microsoft. (Score:5, Interesting)
I deal with Microsoft frequently, and they never fail to amaze me with what how little they value customers. We've had our CSM (Customer Service Manager) change so often, that I don't know who it is right now. Every time we get a new CSM, we get told how they'll be around forever, we'll grow old together, retire together, and 1 or 2 weeks later, swapped.
Midstream through tickets, had them cancel the service request, and ticket, then blame me for it, then admit it was their fault, but they can't do anything. Have you tried to use their administration platforms, InTune, Office, Security (Defender)? Have you dealt with licensing? Just doing something simple, has 100 handshakes, and enough mysteries to make every customer service interaction a new National Treasure movie.
All for what? What's the end game?
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Microsoft is about Azure and Office365 now. Everything else is 'yes we also do that status'
If we are being honest, Azure ain't half bad either, its good for all reasons the past greatest hits were. It does everything it needs to do while being easier to get your head around than AWS, or GCP.
If Microsoft has a problem its that Azure and o365 were huge build outs but now are more or less feature complete. There isnt a growth story, for any company not already on them what can they offer as a compelling rea
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Good list. Now can you reformat that into a ribbon?
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> 3. Convoluted and confusing patchwork of bad software.
This is part of the business model, if they squash bugs, and stop working on features, there's little reason to upgrade. They always polished Excel and let the other programs in office rot, this wasn't accidental it was deliberate so that users are forever encouraged to upgrade to get fixes.
Given this is the way customers are treated, why would anyone buy from them knowing that there's deliberate deprecation by design?
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You forget the quite nice mice (IntelliMouse).
Diversify your skillset (Score:2)
As a young programmer I watched senior coders get laid off and realized several things:
1) The more you make, the more attractive the target for cost reduction
2) You could have extensive knowledge about coding and a specific codebase, it won't save you.
Since then I spend my free time finding skills that my current environment is lacking, then develop those skills and put them to use. In the intervening 20+ years in the field, I have never once been laid off despite making what I make ( admittedly violating r
This happened before at DEC... (Score:4, Interesting)
You all known how DEC ended...
Why with so much profit? (Score:2)
I fail to fathom what drives companies such as Microsoft and Google to lay off people when they are overflowing with profits? When a company is having poor business, layoffs are understandable. Are companies becoming so greedy that no amount of profits is enough?