Microsoft Reduces Office Space Ahead of More Waves of Mass Layoffs
"The Gerstnerisation of Microsoft" - IBM had many old buildings become fossils or sold off (sometimes demolished); now it's Microsoft's turn.
A couple of hours-old reports [1,2] speak of Microsoft in NC and Asia. Based on the WARN portal of NC [1, 2], it's not yet known how many people there got laid off by Microsoft (it can take Microsoft over two days to report this), but there were "cuts to local office space" and "in the Asia-Pacific region" there were "managerial shifts" (reductions at all levels).
Microsoft isn't becoming more efficient, it is shrinking. It removes people who work on code, not some periphery. It's shutting things down, even whole labs with thousands of workers in them [1, 2].
Last week we dubbed this "The Gerstnerisation of Microsoft".
As someone who grew up in the 1980s, the pre-Gerstner IBM was a really big thing. Every important computer seemed to be IBM (there were others, albeit smaller, players) or "IBM-compatible". The Macintosh was a niche product and Microsoft was some tiny company almost nobody had heard of. To people older than myself IBM and computing were almost synonymous (remember antitrust action came later).
Microsoft is going through the same thing now, Windows in particular. Far more people use Android (Linux) than Windows.
"I was right when I was about 14 or 15," Ryan recalls. "I told my dad (who said DVD wouldn't catch on) that "In a few years nobody will be using VHS." then I said "In about 20 or 30 years, Windows won't really matter much anymore." The only reason anyone still uses Windows is inertia from when it mattered a lot. But even that's coming apart. It doesn't matter at all to me. There's not been a single time in over 10 years where I stopped and said "I can't do the thing. I wish I had a copy of Windows on something so I could do this." Probably closer to 15 years than 10. So "It doesn't matter anymore." is not the same as "How many people use it?" They can probably get rid of it if they want to. It's sort of like exorbitant privilege. Windows and Office were necessary for many people, so they had to buy it regardless of what it cost, and that enabled Microsoft to suffer enormous losses elsewhere trying to make other divisions work out. But that's not true anymore. So what their "credit rating" is matters because they need loans on fixed interest debt. Then they face a payments crisis, so layoffs. In my opinion, "investing" in "AI" just accelerates the decline. Instead of looking for a new business model they just stuff chatbots into things where nobody wanted them. They cost a lot to make, nobody wants them. They should be investing this money prudently into offering better business services. They're not a monopoly with the sort of things Azure is doing, so they need to spend money to make money here. "AI" is crowding this out badly, and while their business customers suffer hours-long outages and security breaches." █
Related/contextual items from the news:
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Microsoft layoffs follow cuts to local office space
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Microsoft shifts focus to Asia-Pacific amid massive job cuts
The tech giant has also made organizational changes in the Asia-Pacific region, including some managerial shifts...