5 ms·

> The company took a $1.2 billion charge in the quarter in connection with its decision to cut 10,000 jobs, revise its hardware lineup and consolidate leases. T

> The company took a $1.2 billion charge in the quarter in connection with its decision to cut 10,000 jobs, revise its hardware lineup and consolidate leases. The charge includes $800 million in employee severance costs. How long does it take to recoup $800m in severance from 10k employees?

didgetmaster 4y ago
$80K per employee?? That seems a little steep to me. I have received some severance packages during my career, but they were never that sweet.
- taneq 4y ago
  If that’s commensurate with their overall compensation, I can see why MS needed to trim their workforce.
  - MuffinFlavored 4y ago
    What's "scary" is if you look at their headcount on a graph, they are still very high compared to their historical headcounts. https://www.macrotrends.net/stocks/charts/MSFT/microsoft/number-of-employees https://www.macrotrends.net/stocks/charts/MSFT/microsoft/num... Doesn't this make one wonder "are more layoffs coming"/needed? We were all criticizing their board in the comments for laying off 10k or whatever it was. Maybe we should be thanking them that it wasn't more? Not saying I think this, just... not an "unfathomable" argument.
    - cherrycherry98 4y ago
      I had no idea they had gotten so big. Roughly 200k employees puts them on par with the size of Bank of America.
    - etempleton 4y ago
      Given the still strong performance this might be it. The cuts were across teams, but some teams, such as HoloLens and 343i seemed to be hit harder. They also need to clear way for bringing on board over 10k new employees from Activision.
- linkgoron 4y ago
  It includes 2+ months of salary for each employee, six months of stock awards, six months of healthcare and probably tax etc.
  - deleted 4y ago
    [deleted]
mattnewton 4y ago
Really depends on who was let go, since salaries are on such a curve. Back of the envelope guess-timate though, that's 80k per person, and if we use the mean total comp of 191.8k (an SDE II from levels.fyi), that's 80/191.8*12months = ~5months? Though this is potentially really wrong because it includes stock which isn't really prorated like that, and doesn't include payroll tax and benefits they won't have to pay.
- MuffinFlavored 4y ago
  I wish I had some insight as to whether they are planning to lay off another 10,000 employees within the next 6-12 months.
- thekiptxt 4y ago
  A huge portion of those laid off were not SDEs, which skews this I think.
  - MuffinFlavored 4y ago
    Could skew it the other way, right? As in, directors + managers + VPs make $200k-$300k on the low-ish?
- safog 4y ago
  Benefits costs add up quite significantly, not just the pay. Pay is made up of base pay + bonus + stock. The stock based comp is weird accounting tricks too where you dilute existing shareholders to pay employees. The direct cost to company there is buy backs but I don't think total buybacks == dilution through SBC. So you have to take into account just the base pay + benefits.
- genghisjahn 4y ago
  I have heard that an employee's cost to the company is twice the base salary. I have no idea of this is true.

didgetmaster 4y ago

$80K per employee?? That seems a little steep to me. I have received some severance packages during my career, but they were never that sweet.

taneq 4y ago
If that’s commensurate with their overall compensation, I can see why MS needed to trim their workforce.
- MuffinFlavored 4y ago
  What's "scary" is if you look at their headcount on a graph, they are still very high compared to their historical headcounts. https://www.macrotrends.net/stocks/charts/MSFT/microsoft/number-of-employees https://www.macrotrends.net/stocks/charts/MSFT/microsoft/num... Doesn't this make one wonder "are more layoffs coming"/needed? We were all criticizing their board in the comments for laying off 10k or whatever it was. Maybe we should be thanking them that it wasn't more? Not saying I think this, just... not an "unfathomable" argument.
  - cherrycherry98 4y ago
    I had no idea they had gotten so big. Roughly 200k employees puts them on par with the size of Bank of America.
  - etempleton 4y ago
    Given the still strong performance this might be it. The cuts were across teams, but some teams, such as HoloLens and 343i seemed to be hit harder. They also need to clear way for bringing on board over 10k new employees from Activision.
linkgoron 4y ago
It includes 2+ months of salary for each employee, six months of stock awards, six months of healthcare and probably tax etc.
- deleted 4y ago
  [deleted]

mattnewton 4y ago

Really depends on who was let go, since salaries are on such a curve. Back of the envelope guess-timate though, that's 80k per person, and if we use the mean total comp of 191.8k (an SDE II from levels.fyi), that's 80/191.8*12months = ~5months? Though this is potentially really wrong because it includes stock which isn't really prorated like that, and doesn't include payroll tax and benefits they won't have to pay.

MuffinFlavored 4y ago
I wish I had some insight as to whether they are planning to lay off another 10,000 employees within the next 6-12 months.
thekiptxt 4y ago
A huge portion of those laid off were not SDEs, which skews this I think.
- MuffinFlavored 4y ago
  Could skew it the other way, right? As in, directors + managers + VPs make $200k-$300k on the low-ish?
safog 4y ago
Benefits costs add up quite significantly, not just the pay. Pay is made up of base pay + bonus + stock. The stock based comp is weird accounting tricks too where you dilute existing shareholders to pay employees. The direct cost to company there is buy backs but I don't think total buybacks == dilution through SBC. So you have to take into account just the base pay + benefits.
genghisjahn 4y ago
I have heard that an employee's cost to the company is twice the base salary. I have no idea of this is true.