Microsoft Plans New Layoffs, Shifts Focus to Increasing Engineer Headcount

Microsoft is considering another round of job cuts as early as May in an effort to further streamline its organizational structure. These cuts are expected to primarily affect middle management and non-technical roles, with the goal of increasing the ratio of engineers on project teams.

The move reflects a broader industry trend, as seen in companies such as Amazon and Google, which have also implemented similar restructuring efforts to prioritize technical talent over managerial positions. The tech giant's strategy to streamline its organizational structure is consistent with Amazon CEO Andy Jassy's advocacy for a leaner organization.

Microsoft is looking into ways to increase managers''span of control,' which means each manager will be responsible for a larger number of employees.While the exact number of jobs at risk is unknown, layoffs could have a significant impact on specific teams.

Google's recent restructuring included a 10% reduction in vice president and manager positions as part of its effort to increase efficiency. Similar to Amazon's "Builder Ratio," which tracks the proportion of engineers to non-builders, Microsoft is focusing on lowering the "PM ratio"—the number of product or program managers relative to engineers in teams. Charlie Bell, Microsoft's security chief who previously held a prominent role at Amazon, is reportedly pursuing similar goals internally.

The potential Microsoft layoffs may target employees who have consistently received poor performance reviews. Those who have scored a "Impact 80" or lower in two consecutive years may be affected.

This follows the layoff of approximately 2,000 underperforming employees earlier this year. These changes are part of Microsoft's strategic plan to optimize workforce composition and increase efficiency.

Microsoft's restructuring efforts are reminiscent of the technology industry's shift toward prioritizing technical skills over managerial layers. The company has not responded to these rumors, but the focus remains on increasing the number of engineers on its teams. The strategy is consistent with industry trends in which tech giants prioritise engineers' contributions to driving innovation.

Overall, Microsoft's potential job cuts and restructuring plans reflect a shift toward a more efficient and technically focused workforce, which is consistent with broader industry trends aimed at increasing innovation and reducing redundancy in management roles.