In the wake of Microsoft’s recent layoff announcements, the sobering context has been added to the decision. It’s just not just Microsoft. Google is laying off 6% of its workforce (or about 12,000), Amazon 18,000 (or 1.2%), and even media companies like Vox are facing negative downturns (7%, or around 130 employees).
None of that is supposed to make anyone losing their job feel better. On the contrary, dedicating 6 months or 20 years to a company and getting a pink slip is an unimaginably painful thing to experience. People are scared, and life feels uncertain. Those higher up will have an easier time with it, while entry-level people will have it worse.
But the tech business (and, by extension, media businesses, including sites like this one) are facing significant downturns due to lingering inflation, a possible incoming recession, and a return to more pre-pandemic market demands.
I set all this context up because I keep seeing headlines like “Microsoft CEO Enjoyed 10 Percent Pay Rise Just Before Layoffs” and “That Stings: Microsoft Hosts Sting Concert Before Laying Off 10,000 Employees.”
Even without reading the article, the inference is clear: Microsoft is foolishly wasting money that could instead be used to save some of those jobs. And then we all get to wag our fingers at Microsoft and feel better about ourselves without actually doing anything to improve the world.
Congratulations.
But the fact is Microsoft didn’t lay off people because it couldn’t afford them. Microsoft, like Google, Apple, Amazon, and Meta, is swimming in cash. Microsoft’s quarterly earnings may come in worse than expected this week, but these layoffs aren’t about being able to afford to keep people. Instead, it’s about shifting direction.
For instance, recent reporting says Microsoft is cutting back on augmented reality (AR) and HoloLens. A good chunk is because the US Army project is falling through on the funding. What would be a long and financially lucrative contract was turning into a shorter one with no guaranteed funding. When you don’t have a market to sell your thing, you don’t keep employees around to work on it. (And the prospect of consumer AR still seems like a pipe dream).
These layoffs aren’t about being able to afford to keep people. Instead, it’s about shifting direction.
Other areas like gaming, specifically 343i, have also been hit hard. But how did the last Halo game do? It was terrible. Like it or not, something is wrong with the game’s direction. Unfortunately, your rank-and-file developers get caught up in bad managerial behavior and lose their jobs. It all sucks.
In other words, many of these layoffs are due to Microsoft pivoting as a company. They look at what works and fund that while looking at what doesn’t and downsizing. Paying people to stick around even though that team is not making money is not how companies should run.
Oh, but the Sting concert!
Another faux outrage movement is with Sting performing at the World Economic Forum in Davos for about 50 people. Here’s how the New York Post characterized it:
“The star-studded event reportedly struck a “sour note” for some employees as they face the uncertainty of sweeping job cuts and worsening conditions in the tech sector. … Workers reportedly grumbled over Microsoft’s significant presence at the proceedings in Davos, where billionaires and elites fly each year to rub elbows and talk major global issues.”
The optics looked terrible, but let’s get real: Microsoft didn’t ask Sting to play a quick show in Davos the night before. That contract was likely signed many months before layoffs were on the table. An event like the World Economic Forum isn’t planned and whipped together in a few weeks.
And what would have canceling the show done anyway? It wouldn’t have saved any jobs. I guess some people would feel better even though 10,000 positions are still going away. Seems rationale.
None of this is to say that Microsoft’s actions are without criticism.
But Microsoft is a business. It can’t just stop doing normal PR relations and events because it has to do layoffs. So connecting the two incidents are people who want to feel morally superior without offering tangible alternatives or answers.
None of this is to say that Microsoft’s actions are without criticism. I’m always blown away by how someone can work for them for 15 or 20 years and just be laid off. On the one hand, you must appreciate how seniority doesn’t matter. You have been there six months or 10 years – everyone is the same. Alternatively, I find it disturbing that a company like Microsoft doesn’t value dedication and loyalty.
You can also rightly argue that many of Microsoft’s recent failings are self-inflicted due to legacy management styles and myopic decisions.
But let’s not confuse a shifting business strategy with being a charity.
As the old expression goes, play the man, not the puck. If you’re concerned about fairness and hate these mass layoffs, let’s have that conversation. Let’s discuss CEO pay limitations, worker empowerment, Parecon (participatory economics), and different managerial structures. Let’s get real and debate the fundamentals of the big “C” word, Capitalism.
But most of you don’t. So instead, it’s easier to snark about a Sting concert without addressing the root cause. Let’s do better.
