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The Broken Microsoft Pact: Layoffs and Performance Management
- burnt-resistor 1y agoThis was always a con for suckers. The only ways out are unions and employee-owned co-ops by changing the interests to ensure stability rather than merely being fooled by corporate masters who can always change the deal at any time.
- orochimaaru 1y agoUnions don’t prevent layoffs. You’re bound by a union contract which will include conditions for layoffs. Unions can prevent overwork and burn out. They cannot prevent layoffs.
- lmm 1y agoUnions can't (always) make an unprofitable company profitable, but they can prevent fake layoffs that aren't actually warranted by the company's economic condition, like the kind the article is talking about.
- eadmund 1y ago> Unions can't (always) make an unprofitable company profitable Indeed, I think their major trick (in America, anyway) is to make a profitable company unprofitable. Much like the bad forms of private equity from above, they bleed a business dry from below.
- lmm 1y agoLike every other stakeholder, workers and their representatives have their own interests, and sometimes those are in tension with other stakeholders. But while it's very easy for workers and management to end up blaming each other in the aftermath of a failed company, in my experience the failure is usually for more fundamental reasons. When the business is sustainable and growing, the pie is growing for everyone and the conflicts are manageable, and when it's shrinking you're probably doomed anyway. But then I tend to feel the same about most cases of private equity.
- steveBK123 1y agoI never took implicit “they pay less but it’s more chill” culture stories seriously. You can classify certain job functions this way more readily than company wide cultures.
- dshacker 1y agoYeah, I was afraid of generalizing throughout the company. I think compared to other companies it seems to have a benefit of being more "nice". Maybe it's mostly targeted towards tech roles at that?
- steveBK123 1y agoI think everyone should dissuade themselves of the concept that such a thing as a "nice" company really truly exists. I've worked at close to 10 companies in my career both public and private. Some of the companies I've worked the big "family" culture and "our people are our greatest asset" company principles were the ones to do the deepest and swiftest cuts. Meanwhile their supposedly comparatively ruthless shark infested competitors keep on keeping on. The people I saw most impacted by this were the ones that took the culture both literally and seriously, staying in the big happy family companies long enough to develop far too much company-specific rather than industry specific expertise, just in time to get laid off at 50.
- geodel 1y ago> big happy family companies long enough to develop far too much company-specific rather than industry specific expertise, just in time to get laid off at 50. I think this is a great point. Lately this is number one thing I feel concerned about. Though paradoxically they are coming from different direction as pushing buzzword driven development too fast in process making stable products unstable, calling them out of date. And then getting rid of products along the people who worked on them as dead weight.
- ballmersucker 1y agoYou thought MS was "nice"? WTF were you smoking?
- Havoc 1y ago> But something shifted. The powers that be realized an anxiety riddle fearful workforce can get stuff done too just fine as long as they don’t have a better option and you dangle the occasional carrot. So as long as all corporations move roughly in lockstep you can drastically change conditions without much consequences It’s a bit like the first big news website implementing a paywall was outrageous and deemed suicide. But if everyone does it…
- hyfgfh 1y agoYeah, now they have AI, Artificial Insecurity just another tool to push us to work more for less It don't work, but you better learn it and use it, because it will replace you and also now you got to delivery 30% more
- int_19h 1y agoThere will be consequences, they'll just take some time to set in. But morale is in the gutter across the company now, and a lot of people who would previously go above and beyond to maintain some level of software quality have thrown in the towel now, since this last round of layoffs, by virtue of who was targeted, very clearly demonstrated that the company doesn't actually care about any of that one bit, and the sole reason to perform is to ensure that you stay above the cut (and even that's hardly a guarantee when whole teams get laid off). Aside from that, there's also the matter of fewer people tasked with the same amount of things. The official line on that is that AI makes the remaining employees more productive. The reality is that it's nowhere near good enough for many products, so it just means overworked people making more mistakes and burning out faster.
- BehindBlueEyes 1y agoThere were already too few people for the tasks before this round of layoffs. The working order has been "do more with less, use AI" for over a year. Every MS FTE whom I knew enough to have that kind of conversation with was stretched thin to the breaking point. Now half their team is gone, and the show must go on apparently. It does not seem viable to me, not even with AI.
- Oggle 1y agoMicrosoft definitely does underpay the market significantly! Like 60% of what other companies of the same level pay, unless you're in the Copilot org. Maybe you'll get a little bit higher.
- wbl 1y agoWhat companies do you think are at that level?
- int_19h 1y agoGoogle, Facebook, Amazon. Amazon is in the same ballpark AFAIK, but the other two have noticeably better comp. The "Microsoft deal", such as it is, was that it's a place where you don't have to grind hard. This has changed now though.
- marssaxman 1y agoIt certainly didn't work that way for me, back in the late 2000s - my stint at Microsoft was the most exhausting grind of my career. The common wisdom at the time was that different divisions of Microsoft had widely varying cultures, with as much difference as you'd expect to see between unrelated companies, so perhaps that was just DevDiv.
- int_19h 1y agoI was in DevDiv myself. From what I heard, Azure was where the grinding was at its worst.
- paxys 1y agoThe majority of Microsoft employees are in Seattle/Redmond, which has no state taxes and a lower cost of living than the Bay Area, so it isn’t a straightforward comparison.
- Arainach 1y ago
- saagarjha 1y agoGoogle had the same "no layoffs" vibe too, and they paid better. Turns out that everyone is willing to do layoffs.
- JKCalhoun 1y agoStill waiting for the Apple shoe to drop. Has Apple just not been as expansionist as these other companies? Or is it still coming?
- nemomarx 1y agoApple is famous for keeping a huge war chest and not reinvesting it, right?
- robotnikman 1y agoI know they were when Jobs was still in charge, not sure if it has been invested elsewhere since then
- m463 1y agoMy impression is that apple seems to have loads and loads of disposable contract workers. Does apple actually hire that much?
- geodel 1y agoThey just didn't hire a lot like other companies. No cloud or AI bandwagon with tons of hiring and then later finding no work recently hired folks. Also work conditions were more traditional and stiff compared to pure software play companies so lot of people weren't falling over each other to get job at Apple. Also Apple is good at lot of outsourced work for long time compared to many other companies. So they don't tons of non-core software stuff in-house. In that matter they are more like typical Fortune 500 companies than SV company.
- mrheosuper 1y agomaybe that's why their AI/Assistant suck
- endemic 1y agoI’ve never worked at Microsoft, but the author’s three takeaways is how it’s always been for other companies.
- deleted 1y ago[deleted]
- xivzgrev 1y agoAs a manager I’m going thru performance management myself. It’s a hard experience. What I learned is: you need to hold a high bar, because people can do anything to keep their job, and often not what you want them to do What you want is someone who is open to feedback, understands it, and takes effective action. Outside of that, there’s a whole gamut of people. Some get defensive. Some are politely open to feedback but don’t actually try to understand. Some understand but don’t care enough to follow thru. And some try hard but aren’t effective. All of that is bad for your team, and unlikely to change. Just need to cut your losses to open your seat for someone who can do it. The current person i have is open to feedback, but doesn’t fully understand it and doesn’t care to. It’s like dragging a horse to water. After doing that for six months my manager pointed that out, it’s just not a good fit. I like to see the best in people, and even a little bit of improvement gives me hope. But it’s dragging down our team potential. It’s a hard truth.
- cheschire 1y agoI would much rather work for a place where the culture allows people to be humans, and 1x and 10x people can coexist under the same management. But hey I am judging off of basically one sentence you wrote so what do I really know about your situation?
- deleted 1y ago[deleted]
- giingyui 1y agoYou are not being paid by a company “to be human”. You are being paid to produce. If you don’t produce it makes sense they don’t want to pay you, especially if it’s easy to find someone else to produce in your place.
- piva00 1y agoYou've perfectly described why most corporations get low-engagement employees producing whatever is asked without much questioning because they simply don't care. You pay me, I produce what you asked, no matter how shit it is since I'm not paid to be a human with qualities that could produce something better. It's a two-way street.
- wenc 1y agoMost financial advisors tell you to keep a rainy day fund with a 3-6 month runway. Given what's been happening in the tech industry and the economy at large, I now keep a 1-year emergency fund in a money-market fund at 4% (Fidelity SPAXX). I'm probably losing out on some growth (SP500 grew 11% over the past year, despite the massive drop in April 2025), but at least I have liquidity in case I get laid off. That's the kind of game I feel I have to play these days.
- casper14 1y agoSame! Still good that you can get 4% on a risk free investment these days
- anotherhue 1y agoOr put another way, your income is depreciating at at least 4%.
- aitchnyu 1y agoUmm, my search engine says US inflation was 4.7 percent in 2021, 8 in 2022, 4.12 in 2023, 2.9 in 2024, 2.4 this year. Will you choose this in the 4+ percent years too?
- wenc 1y agoDid you also check 7 day yields (interest) in those years? SPAXX is currently 4%. But was 5% in previous years (it holds US treasuries and has a very low expense ratio and holds its NAV) https://fundresearch.fidelity.com/mutual-funds/summary/31617H102 https://fundresearch.fidelity.com/mutual-funds/summary/31617...
- sarchertech 1y agoIf you only have a little more than a year in total assets that probably makes sense. But if you have much more than that, there’s no reason to keep an entire year in such a low return investment. Money in say an S&P500 ETF can be liquid in 1-3 days.
- ThrowawayB7 1y agoThis overlooks the 2009 and 2014 layoffs and the notorious Mini-Microsoft blog, still up over 15 years later(!), where they were discussed. The notion of a "Microsoft Pact" is absolute baloney but, had there been one, it was broken back then, not anytime recent.
- dshacker 1y agoRight, but there is even an implicit pact, you get lower-than-market compensation but you get better benefits and long-term stability. At least that's the mental math you did when joining the company and comparing offers between employers.
- hackthemack 1y agoI wish people were not so adverse to unions. The company will never be your friend. You will almost never have much leverage over what the company wants to do. The information you have will most likely be very asymmetrical to what the company has insight into, putting you at a disadvantage. Unions are imperfect. Unions will have its own inside politics. You will pay a union fee. I think humans are fundamentally flawed in not being able to see alternate history. If they have to pay a union, they will not see all the benefits, and only focus on the 50 dollar union fee.
- armada651 1y agoSoftware developers have enjoyed decades of high demand for their skills and the companies that hired them have enjoyed decades of an abundance of capital against a low interest rate. You didn't need a union because you had leverage due to the demand for your skills and companies didn't need to be particularly efficient. This was a time where companies were hiring talented developers just to deny them to their competitors. Nobody was interested in shaking up that status quo by becoming part of a union.
- Arainach 1y agoYou need a union when there's demand precisely because there will be down times.
- FirmwareBurner 1y agoPeople were never good at thinking about a pessimistic future to plan ahead BEFORE the shit hits the fan. Those who did were sidelined as naysayers or buzzkills. Just look at European government run pension systems which are basically legal pyramid schemes, that everyone knows are unsustainable the way things are going right now, but nobody wants to do anything about it when it's more convenient to kick the can down the road until it become a problem under someone else's watch.
- red-iron-pine 1y agoand we're hitting that point. now. but the gist of the parent's arguement is that we didn't before. also keep in mind that unions first popped up in places were people were, like, dying, or getting maimed: trains, mines, electrical, gasfitters, ironworkers. up until now programming has been easy money sitting indoors while sipping lattes.
- charlie0 1y agoRent, don't buy. Maintaining optionality is the thing to do when things are unpredictable.
- deleted 1y ago[deleted]
- int_19h 1y agoThe notion that layoffs are something new at Microsoft is weird. I joined it in 2009 in the middle of a large layoff, and I've seen several more over the 15 years I've spent working there. E.g. almost 8k people were gone back in 2015. Nor is it something unique to them. As far as I know, the only large US tech company that didn't do layoffs in the past decade is NVIDIA (their last one was in 2008).
- Arainach 1y ago>almost 8k people were gone back in 2015 That wasn't a traditional layoff - it was a reimagining of the development process and the elimination of SDET which was overwhelmingly a good thing - I also joined in 2009, and SDET was an utter disaster. All the good SDETs got out of that job - either to SDE at Microsoft or to SDE at another company. Those that were left were largely a waste of money, and the entire culture of "this person writes the code, this person writes the tests" meant that a lot of devs got high recognition and rewards for writing untestable unmaintainable garbage that someone else had to try to cover.
- ThrowawayB7 1y agoMeanwhile, outside of the Redmond bubble, people keep hitting bugs in MS products that never would have gotten past the STEs and SDETs back in the day. Microsoft was forced to build its QA discipline in the '90s and early '00s because they were being torn to shreds by the press and public for the legendary bugginess of their products. Now we're seeing that bugginess creep back in thanks to Nadella. Whenever it comes up among my co-workers as a Microsoft product falls on its face yet again, most recently MS Project Online screwing up something as simple as completion percentages during a meeting, I just sigh and quip "Maybe Microsoft ought to consider hiring a QA department."
- cjbgkagh 1y agoPaying 35% below market and promising security to those willing to believe it is a sure way to slowly brain drain the company. People forget how dominant Microsoft used to be in tech.
- geodel 1y ago> For decades, Microsoft operated under an unspoken agreement with its employees—what I call “the pact.” The deal was simple: We’ll pay you 20-50% below market rate, but in exchange, you get stability, reasonable work-life balance, and most importantly, no layoffs. This seems more of employee's made up rule rather than Microsoft's. I worked in a company in early 2000s' and old timer's told me similar rule "that here pay is less but little work and lifetime job guarantee". It was of course bullshit made up rule. As economy changed not only did they tighten the screws but also had many layoffs since then.
- vachina 1y agoRight? I’ve never seen any company have a “pact” to not do layoffs. The more they try to sell this the more wary I’m going to be, especially if it’s an American company.
- squatin64 1y agowhy does this not mention ai? these layoffs are essentially only because of ai both indirectly and directly, perhaps not because of current impactful productivity gains but realignment of strategic resources to invest in ai infrastructure (capital vs labor) and then also likely preparation for the continued exponential improvement of models and coding agents which will require humans to get out of the loop essentially imo all 'pacts' between employers and companies is going to change because basically the entire category of economic work we are doing as a society will become not necessary over the next decade due to this its just that software development is going to come earlier due to its critical nature to the roadmap of model improvement and increasing lab research speed. also due to the fact that RL works quite well for software development, including the more advanced applications like model research also as a preemptive rebuttal for anyone saying i have no idea how swe/ai research works i am a swe who also does ai research work
- nessguy 1y agoThere was a paragraph about AI somewhere in the middle. > The AI efficiency narrative provides the perfect cover for these layoffs. Companies can frame headcount reduction as “leveraging AI to increase productivity” or “optimizing for the future of work.” It sounds forward-thinking and strategic rather than admitting they failed to manage performance or simply want to cut costs. Whether AI actually replaces the laid-off workers’ productivity is rarely measured or proven, but the narrative sells well to investors and the media.
- msteffen 1y ago> This creates a system where companies find it easier to fire good employees in bulk than to fire bad employees individually. The legal protections meant to prevent arbitrary termination end up enabling exactly that I have some passing familiarity with how (California) law firms approach firing, which this article gave me cause to consider: - they do fire unproductive people aggressively (law firms bill by the hour and attorneys are very expensive to employ, so it’s very obvious and financially meaningful to the business when someone isn’t contributing) - when they fire someone, they’re very secretive about it. The person stays on the firm’s website for months, and if you call HR, they’ll say that the person still works there (they probably do, in some narrow technical sense). This makes it somewhat easier for the person to get a new job. Also this a nit but the legal protections aren’t meant to prevent arbitrary termination, which is pretty explicitly legal. They’re meant to prevent discrimination.
- khelavastr 1y agoThis is a butthurt Microsoft employee. They've laid off/performance-pushed 20% or so of employees a year. Concentrated in certain departments more than others. Do Google, Apple Netflie and others not have layoffs? This so