1. MS over-hired, has too many employees, and not enough work?
2. MS is reaping the benefits of AI and can do the same work with fewer employees?
3. MS has over-invested in data-centres and needs to conserve cash to stay in the game during it's unprofitable phase (assuming it's not a bubble)?
Microsoft overhired due to the spike in global usage during the pandemic. Some jobs are being automated but it’s more a question of "How many." And Microsoft was one of the first to start dumping its cash reserves into data centers. There is a good chance these will remain profitable even after any sort of bubble pop because they still remain a hyperscaler that can provide services beyond just AI compute.
overall, given where the economy is at and how much of their war chest is gone, im not surprised to see this happening.
That said, for the past 3 decades at least, tech was a hugely growing sector that provided ever growing employment opportunities. It seems like that time is now over. Even if you take the "Jevon's paradox view" of AI, that is that the cheaper cost of writing software will feed a demand explosion, it's just hard to imagine that many more people will be needed to fulfill that extra demand.
This is why I think it's fair to think "this time it really is different". In past technological revolutions, it really wasn't that hard to see where the new jobs would come from. Now even the leaders of the AI revolution think it will kill tons of jobs. I get a bit worried about the number of young people and friends' kids who decide to major in "business" in college now. It just feels very difficult to imagine a white collar career that will be stable over the next 10 years or so, let alone an individual's 40 year career.
I think this is an extremely pollyannaish view of how technological revolutions have happened. In fact, it is always the exact opposite, people always fail to predict where new jobs would come from.
It was completely obvious in the 80s, and I say this because I lived it, that you would need tons of people building software and in tech generally as PCs and related tech killed off a slew of those admin assistant jobs.
This isn't pandemic over hiring, its layoffs to create fear and give them an excuse. I guarante you, and I'll put money on this. No matter how many people they let go with this, in six months they'll be employing even more than they do today.
They over hired and are still no where near their pre-pandemic numbers.
Given how abysmal Copilot was/is, and how buggy their software has become this year, it's clear that they aren't reaping any benefits from AI usage internally.
most office workers seem to want at least the 20 usd per month plan
This can mean nothing who uses AI for programming, but is useful for day to day office work - and I belive it can sell very well
Office work is many fields in many businesses of all shapes and sizes in many industries. It doesn’t make sense to generalize.
Similarly, Google is improving Gemini and still dominates pretty much everywhere else from the phone to the car and on the web.
They don't have to have the best LLMs to finally deliver on the value they promised over a decade ago. Applications are always a much better moat, and it's not like anyone was going anywhere else anyway. I'm fully expecting Microsoft, Google, Apple, and Amazon to reap soon and buy up datacenters for pennies on the dollar. Market won't crash because China was smart enough to pause and maintain the hardware shortage.
> This can mean nothing who uses AI for programming
It doesn't matter because AI programming never got much buy-in outside of leaner teams working at startups. Startups will continue to migrate towards running their own local models. The corporate world does have some limited use for greenfield and misc tech debt, but will always be slowed down by the need for much larger scale human collaboration. The LLMs don't move the needle at all on productivity when the changes remain small (the parts people agreed on after all the teeth pulling) and the sprints and deadlines are still long.
Either senior talent leaves, people who are close to retiring, or just can find a job easily outside.
Low hanging fruits take the bait and head out.
Mid level people live in fear of either scared to find another job, or worried about layoffs.
Either way the company morale is down the drain for a long time, and a culture is lost.
Also Microsoft has already been trashing morale with year after year of layoffs. They probably assume this won't move the needle.
I always wonder about that with buy-outs. Seems to me that the people who take buyouts are either:
- those who are close to retirement
- those who have other options
I'd assume the first vary in quality the same as your overall workforce, but I'd assume the second would, all other things equal, be better than the average.
Maybe I'm wrong, but it seems like by offering an optional buyout, you'd degrade the overall quality of your workforce. Wonder if there are any case studies about that?
> To conclude, the company was able to specify who was dismissed but was unable to specify who took buyouts despite efforts to ensure retention of value employees, including careful setting of incentive schemes. The case presented in this paper demonstrates that employment adjustment using a buyout framework invites "adverse selection" despite careful employer precautions.
Here's the full PDF: https://econ-review.ier.hit-u.ac.jp/wp-content/uploads/files... (not sure how to translate that)
Are these offers extended to the highest performers with institutional knowledge?
In my experience, there were 3 main groups of people for whom these are attractive:
1) People who are close to retirement.
2) People who are leaving to become stay-at-home parents. So, basically retirement with more work.
3) People who are independently wealthy because they've been with the company forever and rocked the stock price appreciation. So, basically retirement with more money.
The amount of the buyout isn't really enough to move the needle for most other people because it usually doesn't include equity vesting. You're better off phoning it in and waiting for the layoff, because you get the same severance anyway but can continue to vest in peace until the axeman actually hits.
Folks who take the buyout do tend to skew heavily toward people with institutional knowledge, but it's also oftentimes folks who aren't really hungry and engaged with the company's current strategy. Basically folks who know a lot but don't work particularly hard. Particularly in times of big change, it likely does make sense for the company to get rid of these folks and rebuild the company in the image that they want it to be today.
That is not the kind of thing that inspires a person to stick around.
What is happening here is a sign they are changing their view on how this capital allocation works.
To what? We don't know, and I think they might not know yet, either. If you are spending > $4M for a top-end engineer and $8M on their tokens (this refers to a person know personally, it is not hearsay), this will necessarily change the how this allocation works. Maybe it doesn't make sense to park 300 people on tomorrow's PowerBI any more.
What is clear is that we are not in anything approaching an equilibrium state. MSFT (and others like them) clearly do not have enough conviction to fire all the line engineers and only keep the so-called "elite" ones. It's not even clear that they think we're on that trajectory. I think what we are seeing, though, is that they have enough conviction to try to clear the way for more of this kind of spending on these so-called "elite" developers.
Very enticing Microsoft.
Good question, and why limit this question to Microsoft? Why does COBRA have an 18-month limit? There should be no time limit to COBRA at all, especially if you have been with the same employer for many years. The law needs to be updated. Contact your elected representative.
https://www.cnbc.com/2026/10/26/microsoft-msft-voluntary-buy...
I suspect this VBO will see a lower acceptance rate because there will be a lot of eligible people in their early or mid careers, and unless you are one of the people who won't have trouble finding a new role, or you expect to be fired/laid off soon, or you're are already on your way out, you probably don't want to be starting the job search right now.
If you don’t take the deal now, you’ll spend your remaining days at Microsoft wondering if you’ll be included in the next round of involuntary layoffs, possibly with worse terms and timing.
Will the job market be that much better for you in a year or two?
also Excel, but Excel's usability is being killed by sharepoint
If you really believe otherwise I encourage you to go have a chat with any one of a number of FOSS maintainers to hear their experiences pre and post LLMs.
"A computer lets you make more mistakes faster than any other invention, with the possible exceptions of handguns and Tequila." — Mitch Ratcliffe
This is like watching the cryptobros all over again, except a thousand times bigger.
(Before they droll on: no, of course this take doesn't mean that LLMs are unimpressive and never useful. Only people in a cult take any criticism to mean that.)
I've done interviews where the person being interviewed just piped the task.md file in to claude and we sat there in silence for 20 minutes where claude completed the entire task. What is even the point. I preferred the people who did it all manually because at least I saw them understand something, I'm sure those people could also type "Claude, implement everything in the task.md" too.
But perhaps other interviewers actually do want to see you hand the whole task off and wait.
AI stole our labor, is renting it back to us, and if you oppose you‘ll loose your job. This is blackmailing, plain and simple.
Hopefully sooner than later, so microkernel operating systems can...move right in.
Management will get a Golden Parachute but the white collar workers will be left holding the bag.
But do you have data or reusable anecdotal evidence that this is the case?
Given what is happening, it seems more likely they will wonder why they didn't push hard enough.
Whether you like AI or not, its hard to miss that its lead to hundreds of thousands of layoffs.
Now I don't know if I missed this feature in Claude Code or not but I don't believe it has technology for enhancing people's ability to sit around all day doing nothing. Correct me if I'm wrong.
Mass pumping out slightly dodgy code is more of a startup strategy.
Stop insinuating rejecting GenAI is necessarily irrational.
(Maybe my analysis will be different in the future but I will still know why I was avoiding it)
Are you sure the problem is the clankers?
Must you cultists always speak in this way?
With regards, someone "left behind" as the "singularity train" is leaving the platform. Or something.
• Fiscal Year 2026: $133.75 billion (up 31.34% YoY)
• Fiscal Year 2025: $101.83 billion (up 15.54% YoY)
• Fiscal Year 2024: $88.14 billion (up 21.80% YoY)
• Fiscal Year 2023: $72.36 billion
Seems like they can decrease workforce, make up the gap with AI, and increase revenue while doing it
Their reports also tell us AI is very much in the negative.
They have experience and knowledge of the current systems. This would be lost. It takes many years to learn the in depth details of todays complicated systems.
Those years are worth millions for each person. It would take years for any replacement to become equivalent in the lost knowledge. Without this they will be making costly mistakes.
Being prepared for bad luck is also something smart strategists prepare for, because they might not know what will or could happen, but they are ready for consequences.
Thats why we have fire stations and hospitals, because its smart to be ready even if we dont know when or why.
In sport for example, nobopdy says some team arent champs because they were lucky here or there. Luck is how things flow, lucky bounce, the weather, someone in the wrong place at the right time etc.
If this doesn’t go well, we’ll see it in the form of more GitHub and Azure outages/breaches, and competitors filling the gap themselves.
The talented people that built and maintained those systems for the executives have to work somewhere.
In this case it sounds like they are offering it to lower ranked employees (its own dystopian situation), but within that range of people, I still expect that Microsoft will lose more of the better ones.
- bullshit jobs is a thing and many of these positions were make work anyways
- yes philosophically and economically, who will buy X product if all employees are laid off is a thing
- some of these will be rehired, some will be layed off if the voluntary buyout percentage is not large enough
- opinion: Microsoft as a company is a has been dinosaur, soon to be IBM, its (engineer) salaries were on the lower end and were very PM (Program Manager) heavy
- there is a lot of entrenched bureaucracy and top down mandates at this company.
- i personally use Macbooks/MacOS over Surface/XP, Google Docs over Word, GMail over Outlook, Slack over Teams, Firefox over Edge, etc. their user facing products are severely lacking in user experience.
- from my time in the tech industry/friends I understand their bureaucracy existing for the needs of the bureaucracy. their c-suite/leadership is a bunch of world salad morons
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/num...
Server products & cloud services (39% of revenue) M365 Commercial products & cloud services, excludes Consumer (30.7%) Xbox / Gaming (6.6%) LinkedIn (6%)
[1] https://app.edgar.tools/companies/MSFT/disclosures/segments
I’m not claiming this is the most efficient way to get any kind of code written. But if you want to have one hacker sit down and ship the whole product in a couple weeks without any of these business dorks disturbing them, well, that’s exactly what brand-new startups are for.
Wouldn't those people choose to stay? Buyouts are much more attractive if you can easily get a new job.