The Broken Microsoft Pact: Layoffs and Performance Management
53 comments
·July 6, 2025wenc
casper14
Same! Still good that you can get 4% on a risk free investment these days
anotherhue
Or put another way, your income is depreciating at at least 4%.
ThrowawayB7
This 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
Right, 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.
int_19h
The 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
>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
Meanwhile, 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
Paying 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.
hackthemack
I 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
Software 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
You need a union when there's demand precisely because there will be down times.
cactusfrog
The amount of unioned workers keep decreasing because the firms with unioned workers fail or the work is outsourced. I think open source software is the best protection against abuses because workers can take the means of production elsewhere if a company becomes dysfunctional or greedy. The consolidation of patents in other engineering fields has killed the industry in the US.
drewcoo
> I think open source software is the best protection against abuses because workers can take the means of production elsewhere if a company becomes dysfunctional or greedy.
OSS? You mean copyleft? Who does that? Who would use that?
Arainach
>because the firms with unioned workers fail or the work is outsourced
Sorry, you misspelled "decades of Republicans disassembling labor protections and enacting garbage like right to work laws, corporations hiring thugs like the Pinkertons to break up and discourage them, and conservative media spewing lies to discourage membership".
monkaiju
You're totally correct, but it wasn't _just_ Republicans. The Democrats are incredibly anti-labor. Even Biden, who was marketed as "most pro-labor president since FDR" forced the railroad workers back to work.
Both parties are so in capital's pocket that, at least on labor issues, they are essentially the same.
georgemcbay
I'm traditionally pro Open Source but I don't see how it helps much in this case, because whatever effort you put into Open Source software equally benefits the corporations you are fleeing from who can just take your work for free now.
And this is more true now than ever before since they can (so far legally, if not morally) also use LLMs to whitewash off GPL and other such licenses that would in the past have put practical limitations on their usage.
armada651
If you've built up lots of experience working on a closed-source in-house code base that expertise will be tied to the company you're working for and once you're fired all that knowledge becomes useless to you.
If you've built up expertise in an open-source projects that lots of other companies use that knowledge is a valuable asset on your resume.
Oggle
Microsoft 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.
paxys
The 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
It's a straightforward comparison in the area. Below Principal/Staff, Microsoft's stock awards are a (very unfunny) joke and their comp is pretty meh.
I left in 2018. I was 63 (first level senior) and had offers from Google and Meta for a downlevel (L4) at a 40% increase in total comp. The gap has closed slightly in the last 7 years but not much at those levels.
dshacker
Same experience for me, I still remember at IC1 getting 7k stocks over 5 years as my "stock bonus" for the year. which meant getting 1 or 2 MSFT stock every 4 months :D
endemic
I’ve never worked at Microsoft, but the author’s three takeaways is how it’s always been for other companies.
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saagarjha
Google had the same "no layoffs" vibe too, and they paid better. Turns out that everyone is willing to do layoffs.
JKCalhoun
Still waiting for the Apple shoe to drop. Has Apple just not been as expansionist as these other companies? Or is it still coming?
geodel
They 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
maybe that's why their AI/Assistant suck
Spartan-S63
Apple's headcount grew at a much slower pace during COVID/ZIRP in comparison to other FAANG/MANGA companies, so they're less likely to cut full time roles. Contractors have been cut, but there are many fewer guarantees when a contractor rather than a W-2 employee.
m463
My impression is that apple seems to have loads and loads of disposable contract workers. Does apple actually hire that much?
nemomarx
Apple is famous for keeping a huge war chest and not reinvesting it, right?
robotnikman
I know they were when Jobs was still in charge, not sure if it has been invested elsewhere since then
saagarjha
Apple decided it wanted to be fashionably late to AI so I assume it will also be fashionably late to layoffs too.
burnt-resistor
This 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
Unions 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
Unions 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
> 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.
steveBK123
I 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.
int_19h
It was true though. And yes, you're right in that things can vary a lot from org to org, but there's still a median, and "they pay less but it's more chill" described Microsoft pretty accurately until a few years ago.
dshacker
Yeah, 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
I 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.
ballmersucker
You thought MS was "nice"? WTF were you smoking?
dshacker
Comparatively to other companies, (amazon meta) I feel like Microsoft is "nicer"
kevingadd
Can't generalize based on one data point but it really was historically low-stress and low-toxicity in every part of the company I've interacted with in the past 8+ years. If it had been combative and high-stress like some of the past places I've worked I wouldn't have considered the inferior compensation acceptable.
xivzgrev
As 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
I 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?
Most 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.