Microsoft is reportedly preparing for another round of job cuts, potentially as early as May 2025.
The layoffs are anticipated to focus on middle management and non-technical roles.
This aligns with restructuring strategies recently implemented by tech giants Amazon and Google.
This report delves into the details of Microsoft’s upcoming layoffs, the rationale behind them, and the parallels with industry trends.
Microsoft Layoff Strategy: A Focus on Efficiency
Microsoft’s upcoming layoffs are anticipated to primarily affect middle management positions and non-technical roles.
The company plans to boost the ratio of engineers to non-technical staff in project teams. This ratio is known as the “PM ratio” (Product Manager to Engineer ratio).
This approach mirrors Amazon’s “Builder Ratio,” which tracks the proportion of engineers to non-builders, and Google’s recent efforts to reduce managerial layers.
The restructuring plans to increase the “span of control” for managers. This means each manager will be responsible for overseeing a larger number of employees.
This strategy is designed to create leaner organizational structures and prioritize technical talent over managerial roles.
The ‘Amazon and Google Angle’
Microsoft’s restructuring efforts bear striking similarities to recent initiatives by Amazon and Google:
- Amazon: Under CEO Andy Jassy, Amazon has emphasized a leaner organizational structure, focusing on increasing the Builder Ratio. This approach prioritizes engineers and technical contributors over non-technical roles.
- Google: In December 2024, Google announced a 10% reduction in vice president and manager roles as part of its efficiency drive. The company has also focused on optimizing team structures to enhance innovation and reduce redundancy.
Microsoft’s Chief of Security, Charlie Bell, who previously held a prominent role at Amazon, is reportedly driving similar goals within Microsoft.
Charlie’s division is working to raise its engineer-to-PM ratio from the current 5.5:1 to 10:1.
This reflects the wider industry trend of prioritizing technical expertise over managerial roles.
Impact on Microsoft Employees
The layoffs will target employees with consistently low performance reviews, particularly those who have scored an “Impact 80” or lower for two consecutive years.
This follows a previous round of layoffs earlier in 2025, which affected approximately 2,000 employees identified as low performers.
While the exact number of job cuts in the upcoming round remains unclear, the move is likely to significantly impact certain teams.
Employees in middle management roles and non-technical positions are particularly vulnerable, as Microsoft seeks to optimize its workforce composition.
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