this post was submitted on 26 Oct 2026
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I really don’t understand what Microsoft is doing here, well I will just pretend to be willfully ignorant for a second:
When company such as Microsoft is presented with the gift of drastic improvement in productivity, why is their first reaction to lay people off? Shouldn’t they capitalize on the gains, take on more work, release more products gain market share and make more money? Microsoft is a software company. Why aren’t they releasing more software? Why are they laying people off in their video games studios?
There are so many segments of the software and hardware industry they could enter or re-enter or expand. Video editing software, music production software, social media, micro computers, consumer electronics accessories…
Either they have no leadership or they know the productivity gains are not real, or both.
Like others said, it looks better next quarter than a bunch of new projects. Short term gain vs long.
But also, their expenses from all that hosting and usage are high. They’ve masked it creatively, but that only works so long.
Maybe they’re trying to make their balance sheet look less catastrophic in the short term (again, at the expense of the long term).
Whatever it is, that will be the underlying theme. Things must look good immediately, at the expense of sustainability.
I think they know/strongly suspect that the bubble is about to pop. They are trying to drastically cut expenses to better weather the coming economic storm.
Like they don’t have enough money to weather any storm
Maybe they don't.
On the gaming side, at least, they spent billions buying out the competition to then do nothing with them.
And a bunch of studios that did deliver successes, well, they got promoted to unemployment in thanks.
Microsoft is in the looting-by-executive phase of development, I don't know why. I suspect that they see hard times for the company ahead and are extracting every cent that they can before the hammer falls.
My opinion
thier execs and csuites expect a golden parachute thats why.
Only way I can possibly make sense of it is to put myself in the shoes of a capitalist executive. My job is on the line with AI companies reporting massive losses and an earnings call is coming up. If I don't care about human beings, I can just lay them off and that will reduce headcount expenditure so that earnings looks better after spending massive capex on AI. Not to mention the market rewards such announcements by increasing stock valuations since we're running more lean.
However, such a large amount of layoffs could prove unpredictable for workplace morale.
What if we didn't have to pay most of the benefits we do and allow many of our headcount to choose on their own when to leave? We look better in the public eye, we can have a lead time for a couple months so that this earnings report on Wednesday will look like a massive shift for the year end earnings call when we're looking for more investment. We'll be operating so lean it'll be insane. And anyone who doesn't leave voluntarily we can simply lay off afterwards and it'll be a smaller number of layoffs, which the public already treats as normal operating procedure, weeding out the undesirables.
Let's do it.
New products take a long time to plan, develop, and launch at large companies like Microsoft. Laying off 60k employees is quite a bump in quarterly profits.
Indeed. They're padding out their quarterly numbers and kicking the proverbial can down the road. Running the company with less staff is a problem for next quarter (or the next ceo)