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Microsoft to Cut 9k Workers in Second Wave of Major Layoffs
- stavros 1y agohttps://archive.is/Jn4vC https://archive.is/Jn4vC
- strict9 1y agoSurprisingly 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.
- mjr00 1y agoAI works as a smokescreen when doing product development layoffs, but you can't really use it for sales, which is still very human-to-human, or when canceling entire projects like they're doing in XBox Game Studios.
- ricoxicano 1y agoMost of today's layoffs at Microsoft are affecting MCAPS, Microsoft's sales division.
- 999900000999 1y agoI knew this was coming when Microsoft brought Activision. As ex game industry I nearly started crying at the news. Mergers always lead to layoffs, games aren't doing great as they're not essential in an iffy economy. Microsoft is seeing the writing on the wall and cutting internal studios. It's much cheaper to just pay 3rd parties to release on Gamepass vs having to fund an entire games development. I don't think we even see a real "Xbox" in the future. You'll have Xbox branded living room PCs with Windows. They're working on a gaming mode that I guess optimizes Win 11 a bit. Getting a AAA games job will be much more difficult in the future.
- surgical_fire 1y ago> Getting a AAA games job will be much more difficult in the future. If it's outsourced to 3rd parties, in theory, shouldn't the number of jobs be the same? Or are you alluding to AAA games not being as viable to the industry as it once was? I am asking mostly because I seldom play AAA games (for some reason most of them turn me off), and I mostly play indie or retro titles. But I always recognized myself as an outlier, and I would presume most people are primarily interested in the big releases.
- staticman2 1y agoXbox has been a declining brand for a while now. They are struggling to make the case for buying games from the Windows Store instead of Steam and they are struggling to make the case to buy an Xbox Console instead of a Sony or Nintendo Console. If we see Xbox branded PCs in the living room- that's more a sign of pivoting due to failure than anything else.
- keyringlight 1y agoThe aspect I wonder about for windows vs xbox(console) is that I find it hard to imagine they make much money on the consumer side for windows, yet they have a certain support burden for maintaining/advancing the windows platform and DirectX. I assume xbox contributes heavily to making it worth their while to work on DirectX, but without it there seems to be a lot of beneficiaries that don't contribute back - so what's Microsoft's motivation to have their own API? Even when D3D12 came out there was commentary how very close it was to Vulkan, which was supposedly largely the work of DICE engineers working for AMD to create the preliminary Mantle implementation.
- ffsm8 1y ago> games aren't doing great as they're not essential in an iffy economy. Historically, games have actually performed extremely well in economic downturns. Likely because they're extremely cheap entertainment if you count $ per hour of entertainment, but that's just my view on it. And gaming as a whole is doing great. The only part that's falling off a cliff is the woke garbage life service games AAA studios have been releasing for the last ~10 yrs or so. Whenever the studios didn't make dumb political messaging the core of the game... And instead made a good gameplay loop first, they've generally succeeded pretty well. It takes skill to make a game centered around political messaging and have it be good, (e.g. spec ops the line, MGS, metaphor:refantazio ), and none of the woke garbage that flopped ever had anything even attempting to create a world in which this messaging made sense. So we're left with completely nonsensical catering to politics no average person cares about whatsoever. I mean we've even got single dev games that got to the charts of steam (schedule I).
- daxfohl 1y agoI don't recall reading any official statements, ever, that said layoffs were due to AI replacing engineers. Do you have examples? I think that line gets thrown in by reporters that don't know what they're talking about, or HN/LinkedIn users that haven't actually read the statement. I could easily be wrong; I can't say I've thoroughly perused every layoff statement from big tech, but I frankly don't even see how it would be positive PR that you're replacing workers with machines, much less worth outright lying about.
- trashcan 1y agoThe first sentence of the article is: > Microsoft Corp. began job cuts that will impact about 9,000 workers, its second major wave of layoffs this year as it seeks to control costs while ramping up on artificial intelligence spending. And AI is a bullet point in the "Takeaways, powered by Bloomberg AI" section as well.
- strict9 1y agoYes. But in most messaging the layoffs are a result in productivity gains supposedly from AI. Not the same reasoning as capex costs.
- trashcan 1y agoI'm just responding to what you said: > Surprisingly no mention of AI in an article about mass layoffs at a tech company. Sorry if I misunderstood.
- aaomidi 1y agoTheir HC still keeps growing so…
- ActionHank 1y agoThey've all done so many layoffs that they've realised there is no need to give the public a reason anymore, they don't need a scapegoat.
- seatac76 1y agoXbox 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.
- tjpnz 1y ago>Their pivot to a marketplace model where their games run everywhere is an admission that they lost the race to Sony. Don Mattrick has a lot to answer for. Microsoft was killing it during the seventh generation and he was able to burn everything down over a period of two days. Xbox never recovered after that.
- amendegree 1y agoThe Kinect was super cool as a demo but totally failed to actually make compelling gameplay in the standard living room
- RandallBrown 1y agoI dunno, Dance Central was really fun.
- bitwize 1y agoThe dream of the Kinect lives on in the Nex Playground... the Mattel HyperScan of the 2020s.
- ModernMech 1y agoThe real legacy of the Kinect was that it revolutionized vision in robotics, as it made sensors that used to cost thousands, cost $150.
- anonymousab 1y agoDon Mattrick isn't the reason that so many Microsoft studios have repeatedly shipped poor products or failed to ship at all over the past decade. Don Mattrick isn't the reason reason that Microsoft still seems to have the worst taste-testers in the industry. Don Mattrick isn't the reason that internal studios like 343 have messed up 18/6 requirements. Don Mattrick isn't the reason that Microsoft kept acquiring, messing up and then firing studios, ending with a massive acquisition that can't even pay itself off for over a decade. And above all, Don Mattrick isn't responsible for the relentless drive for a weird fusion of unprofitable subscription service and cloud streaming offerings at the cost of overall game sale profits. Don Mattrick's mistakes were near-fatal, but Phil Spencer's done more than his equal share of torpedoing the Xbox division. The blame at this point can rest squarely on his shoulders. Well, him, and the person who refuses to replace him.
- deleted 1y ago[deleted]
- idkwhattocallme 1y agoFor 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).
- runjake 1y agoDidn'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-ceo-satya-nadella-reveals-why-6000-employees-were-laid-off-chief-product-officer-shares-key-advice-for-coders-3862902/ 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."
- atomicnumber3 1y agoAlso, if it were actually about "low performers", this wouldn't be in the news. They'd just be terminated during/before perf review.
- 0cf8612b2e1e 1y agoEh, 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.
- ChrisArchitect 1y ago[dupe] https://news.ycombinator.com/item?id=44443223 https://news.ycombinator.com/item?id=44443223
- shadowtree 1y agoThis pairs well with: 1 - Microsoft investing 3bn USD in India-based developers: https://www.reuters.com/technology/microsoft-invest-3-bln-expand-azure-ai-capacity-india-2025-01-07/ 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/ https://www.myvisajobs.com/employer/microsoft/ Utterly predictable behavior by Satya Nadella.
- pratnala 1y agoLayoffs are planned in India too.
- symlinkk 1y agoReally? Where do you see that?
- ilove196884 1y agoI am in India with friends in their last year in college. Hiring is effectively ice cold. Companies like TCS, Infosys wouldn't come to his college but now do. I just want to say good luck, these projects and products are on autopilot with no hiring in India and layoffs everywhere.
- InkCanon 1y agoThat probably has more to do with the absolute tsunami of CS graduates India produces.
- InkCanon 1y agoNot according to the head of Microsoft India.
- onlyrealcuzzo 1y agoI will just comment that MSFT felt the need to get 1264 approvals for NEW H-1B petitions THIS year.
- jajuuka 1y agoThese 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?
- InkCanon 1y agoI really want to destroy this blatant lying by tech CEOs that these are layoffs because of AI, tax laws or interest rates. Most tech companies have headcounts at their peak or slightly below. Whenever these amounts are fired, often near equal amounts are hired in India (and not counting L-1 transfers into the US, H1Bs etc). AI is a fiction invented to cover up the true reason: tech companies have adopted a long term strategy of profit making by wage arbitrage. They have identified their largest cost to be people, and are working to fix this.
- crmd 1y agoI 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.
- jimmydddd 1y agoThe Wall Street bros love layoffs. They think it makes a company more efficient. They don't see it at all as a problem with management, they just think it's a great idea. So the stock often goes up with a layoff announcement.
- ABS 1y agothere is no lost love between me and Wall Street "bros" BUT it's not their job to run the companies, their job is to buy and sell shares based on results and potential future results. When a company decides to go public and take their money it's still the company's responsibility to run their business and keep the people they took money from in exchange for shares happy.
- sokoloff 1y agoSo, 43 years ago?
- heathrow83829 1y agowell, as productivity per employee increases you need fewer of them. So lay offs can be seen as a sign of a healthy productivity increase. FAANG total headcounts have been trending down for years now (2-3).
- rl1987 1y agoTwitter layoffs of 2022 might have been the Lehman Brothers moment that marked the end of programming gold rush.
- pseudosavant 1y agoMicrosoft'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?
- trollied 1y agoThe answer is shareholders.
- pseudosavant 1y agoIt is like we need to find a "post stock market" capitalism? The stock market is kind of the original crypto scheme after-all. Capitalism doesn't require a stock market.
- cosmicgadget 1y agoPrivately held companies exist too. They also do layoffs.
- onlyrealcuzzo 1y agoThat's not good enough for a P/E of 40....
- devjab 1y agoI'm not going to defend Microsoft, but you don't budget based on current achievements. You budget on future prospects, and right now Microsoft is facing some tough times in Europe. The biggest IT expense in my country is the public sector buying various Microsoft licenses, and everyone from the top down are looking into replacing Microsoft with Open Source alternatives due to digital sovereignty. I doubt that has a big impact on Microsoft's gaming divisions, but it would help explain why they might not think the previous decades of growth will continue.
- mrtksn 1y agoThis 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.
- crmd 1y agoEarlier 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.
- htrp 1y agoHe retired before the business climate could move against him
- eastbound 1y agoDid the company crash? In other words, was it a sustainable way of working, or was it a way that did not only end up removing the jobs of those who would have been fired, but also those who wouldn’t have been, destroying more jobs than it saved by reassigning people?
- mxuribe 1y agoHi @crmd For that tech industry-famous CEO, did the company that they used to run continue/preserve even a little bit of that good and common-sense approach? Because if so, then I'd love to know the name of the firm...so that i can immediately apply for a role there. (My profile has my email address if you wish to keep the company name sharing private.) Mind you, I'm employed, but, ahem, less than enthused with my current state of affairs. :-)
- nly 1y agoAren't most MSFT employees also shareholders thanks to stock awards?
- RajT88 1y agoThat's how they retain them.
- nyarlathotep_ 1y agoI 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?
- InkCanon 1y agoI predict many areas will eventually become like old mining/factory towns. Middle class jobs are being offshored at an astounding rate. Just doing some math - if a tech company lays off 7% of its employees for six years and sends the jobs overseas, nearly half of its American employees will be fired
- nyarlathotep_ 1y agoI don't think it'll get that bad. My mostly uninformed worse case estimate is a large portion of these companies become something like the "body shops" (I believe MS has some association with Accenture, so that'd fit) where they maintain a minimal US presence for (mostly) customer facing "sales"/"high touch" positions so they have someone to broker deals and contracts with the (often clueless, IME) F500s, and then outsource all implementation work offshore. Same goes for some large portion of "important" managers. For the "deep"/important/critical technical work, there will likely be staff retained on-shore, while the "boring" CRUD-type work that comprises some portion of the FANNAGS (whatever) is done overseas. It's unlikely, say, for Google Search or AWS EC2 or something critical at MS (M365 maybe?) to be totally off-shored, but lesser services/functions are a likely target. (I know this is already happening to some extent at these companies; I've heard from reputable sources there's some large services that were nearly entirely built by staffing firms) Basically, I think it's two things: we've reached the end of stratospheric growth in "tech" (sorry I just don't see the LLM wave getting there; a million SAAS thingys to "vibe code" a React calorie tracker ain't it), there's a massive surplus from the ZIRP era paired with some sort of obvious recession happening (or that's been going on for a while). It's also a reset of sorts--look I'm as "pro software" as the next commentator here, but it's pretty absurd to think that there's loads of people making 200K+ to write CRUD stuff. There's just not a "shortage" in any way for any of these skills, as anyone doing a job search can attest. This type of pay is really only "rational" in the markets where the cost of living has skyrocketed in the manner it has (largely/entirely a function of the "growth" era in SF/Seattle/Austin). It never seemed sustainable, and I suspected there would be some abrupt end when the "learn to code" era really took off. On a positive note, perhaps those cities would be more affordable, but the in-elasticity of housing prices on the "way down" are always a problem for buyers.
- 2OEH8eoCRo0 1y ago$3tn market cap and can't find anything for them to work on? Yikes. Sounds like a Monopoly. Why bother building something new?
- darthplagius 1y agoMeanwhile my buddy at Microsoft working on AI tools to "increase employee and engineer productivity" just started ramping up sharing job postings for their department.
- TurkishPoptart 1y agoAmerican employees are, for the most part, being replaced by H1-B visaholders via off-shore contracting companies. This needs to change.
- mxuribe 1y ago> American employees are, for the most part, being replaced by H1-B visaholders via off-shore contracting companies... American companies have been trying to replace American works for decades....this is not new. I wonder if trying to stop folks trying to make a simple decent living in the U.s. is not the right approach? ...Rather, i think the focus should be against the leaders of the American companies...Because they seem to be the ones pushing to get rid of ALL workers...sure, for now, they're trying to replace American workers, but soon enough they'll want to get rid of the H1B workers too...and eventually get rid of ANY/ALL workers if it means they can squeeze as much money for themselves. If/When AI and robots come en masse to "steal jobs", would you blame the workers who get kicked out of the companies (even if they had upskilled themselves), or would you blame the leaders who kicked the people out? With all due respect, my opinion is that i think you're blaming the wrong people.
- vitaflo 1y agoVarious 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.
- elcritch 1y agoGiven 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?
- mxuribe 1y agoHere's what i learned: the person buying software/services at many enterprises cares very little whether the thing being purchased is actually any good or not. They either pick based on some brand awareness (who doesn't know who IBM used to be, and who Microsoft is nowadays?), or they defer to someone else in the org...and that "some other senior leader person" in the org may or may not be the proper person to make the decision, etc....and then, the rest of the employees from said enterprise are stuck using something that very few might have chosen. Do i think there are good purchasers out there? Sure, but my direct experience is that the good ones are very few and far between sadly...and then momentum takes over in perpetuity. And, then of course there's the "do as the competitors do", where when employees DO BRING UP good alternatives, the same aforementioned type of purchasers use the argument: "Well, lots of other firms and even our competitors use Microsoft...so why not stick with Microsoft...etc?" Years ago, there used to be the phrase: "No one got fired for buying IBM...". I suppose nowadays you swap that brand out with "Microsoft", or "Google", etc. This rabbit hole goes really deep....but i encourage the interested to look up this IBM phrase, and you'll get tons of literature on why companies make purchasing decisions, and more importantly why they're often poor decisions.
- nyarlathotep_ 1y agoThis is also how the contracting firms maintain business. Accenture, Deloitte, et al are some of the only businesses that are "trusted partners" for the big F500s* or the only firms that are sufficiently capitalized/insured etc etc such that they can "win" the big jobs. Quality and such doesn't matter much--if you and I could spin up and LLC tomorrow with the ability to deliver something at 10x the quality in half the time, it literally wouldn't matter, for exactly those reasons. It's an identical situation to buying services/software from MS. *the amount of work outsourced at these places is staggering, speaking from experience.
- freggeln 1y agoAnd at the same time Microsoft announces a new (sponsoring) partnership. https://news.microsoft.com/source/emea/features/premier-league-microsoft-partnership/ https://news.microsoft.com/source/emea/features/premier-leag... Just excellent timing. :leSigh:
- insane_dreamer 1y agocutting an xbox game studio that was already working on 3 games, as part of this: https://www.windowscentral.com/gaming/xbox/microsoft-is-closing-down-xbox-studio-the-initiative https://www.windowscentral.com/gaming/xbox/microsoft-is-clos... meanwhile revenue is up 15% YOY
- slake 1y agoThis is just MSFT (as did others) acknowledging the future has a lot less workers in it.
- slake 1y agoThis 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.
- vitaflo 1y agoOr 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.