Microsoft is reportedly evaluating another round of job cuts as early as May in a move aimed at further streamlining its organisational structure, Business Insider has reported, citing people familiar with the matter. These cuts are anticipated to primarily affect middle management and non-technical roles, in an effort to enhance the ratio of engineers within project teams.
The move reflects a broader industry trend seen in companies like Amazon and Google, which have also undertaken similar restructuring efforts to prioritise technical talent over managerial roles. The tech giant’s strategy to streamline its organisational structure aligns with Amazon CEO Andy Jassy’s approach of advocating for a leaner organisation.
“According to the report, Microsoft is exploring ways to increase the ‘span of control’ for managers, meaning each manager would oversee a larger number of employees.” While the exact number of jobs at risk is not yet known, the layoffs could significantly impact certain teams.
Google’s recent restructuring included a 10% reduction in vice president and manager roles, part of its drive to improve efficiency. Similar to Amazon’s “Builder Ratio,” which tracks the proportion of engineers to non-builders, Microsoft is focusing on reducing the “PM ratio”—the number of product or programme managers relative to engineers in teams. Microsoft’s security chief Charlie Bell, who previously held a prominent role at Amazon, is reportedly driving similar goals internally.
The potential Microsoft layoffs may involve targeting employees with consistently low performance reviews. Those who have scored an “Impact 80” or lower for two consecutive years might be affected.
This follows a previous layoff of around 2,000 underperforming employees earlier this year. These moves are part of Microsoft’s strategic plan to optimise workforce composition and improve efficiency.
Microsoft’s restructuring efforts are reminiscent of the tech industry’s shift towards valuing technical skills over managerial layers. The company has not commented on these speculations, but the focus remains on increasing the proportion of engineers in its teams. The strategy mirrors industry patterns where tech giants prioritise the contribution of engineers to drive innovation.
Overall, Microsoft’s potential job cuts and restructuring plans reflect a shift towards a more efficient and technically-focused workforce, aligning with broader industry trends aimed at enhancing innovation and reducing redundancy in management roles.