Microsoft offers voluntary buyouts to a quarter of its workforce
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What is happening here is a sign they are changing their view on how this capital allocation works.
To what? We don't know, and I think they might not know yet, either. If you are spending > $4M for a top-end engineer and $8M on their tokens (this refers to a person know personally, it is not hearsay), this will necessarily change the how this allocation works. Maybe it doesn't make sense to park 300 people on tomorrow's PowerBI any more.
What is clear is that we are not in anything approaching an equilibrium state. MSFT (and others like them) clearly do not have enough conviction to fire all the line engineers and only keep the so-called "elite" ones. It's not even clear that they think we're on that trajectory. I think what we are seeing, though, is that they have enough conviction to try to clear the way for more of this kind of spending on these so-called "elite" developers.
1. MS over-hired, has too many employees, and not enough work?
2. MS is reaping the benefits of AI and can do the same work with fewer employees?
3. MS has over-invested in data-centres and needs to conserve cash to stay in the game during it's unprofitable phase (assuming it's not a bubble)?
Given how abysmal Copilot was/is, and how buggy their software has become this year, it's clear that they aren't reaping any benefits from AI usage internally.
most office workers seem to want at least the 20 usd per month plan
This can mean nothing who uses AI for programming, but is useful for day to day office work - and I belive it can sell very well
Similarly, Google is improving Gemini and still dominates pretty much everywhere else from the phone to the car and on the web.
They don't have to have the best LLMs to finally deliver on the value they promised over a decade ago. Applications are always a much better moat, and it's not like anyone was going anywhere else anyway. I'm fully expecting Microsoft, Google, Apple, and Amazon to reap soon and buy up datacenters for pennies on the dollar. Market won't crash because China was smart enough to pause and maintain the hardware shortage.
> This can mean nothing who uses AI for programming
It doesn't matter because AI programming never got much buy-in outside of leaner teams working at startups. Startups will continue to migrate towards running their own local models. The corporate world does have some limited use for greenfield and misc tech debt, but will always be slowed down by the need for much larger scale human collaboration. The LLMs don't move the needle at all on productivity when the changes remain small (the parts people agreed on after all the teeth pulling) and the sprints and deadlines are still long.
Office work is many fields in many businesses of all shapes and sizes in many industries. It doesn’t make sense to generalize.
MS must be losing mountains of money over this.
Microsoft overhired due to the spike in global usage during the pandemic. Some jobs are being automated but it’s more a question of "How many." And Microsoft was one of the first to start dumping its cash reserves into data centers. There is a good chance these will remain profitable even after any sort of bubble pop because they still remain a hyperscaler that can provide services beyond just AI compute.
overall, given where the economy is at and how much of their war chest is gone, im not surprised to see this happening.
That said, for the past 3 decades at least, tech was a hugely growing sector that provided ever growing employment opportunities. It seems like that time is now over. Even if you take the "Jevon's paradox view" of AI, that is that the cheaper cost of writing software will feed a demand explosion, it's just hard to imagine that many more people will be needed to fulfill that extra demand.
This is why I think it's fair to think "this time it really is different". In past technological revolutions, it really wasn't that hard to see where the new jobs would come from. Now even the leaders of the AI revolution think it will kill tons of jobs. I get a bit worried about the number of young people and friends' kids who decide to major in "business" in college now. It just feels very difficult to imagine a white collar career that will be stable over the next 10 years or so, let alone an individual's 40 year career.
This isn't pandemic over hiring, its layoffs to create fear and give them an excuse. I guarante you, and I'll put money on this. No matter how many people they let go with this, in six months they'll be employing even more than they do today.
It impacts absolutely everything. The dynamism from a growing org is gone. Managers have very slim opportunity for promotion. If you need people, you have to find them from another team. I'm relatively new on my team with 5 years there.
I think this is an extremely pollyannaish view of how technological revolutions have happened. In fact, it is always the exact opposite, people always fail to predict where new jobs would come from.
It was completely obvious in the 80s, and I say this because I lived it, that you would need tons of people building software and in tech generally as PCs and related tech killed off a slew of those admin assistant jobs.
Typists and data entry work cratered, but overall admin support actually went up.
There are hundreds of millions of workers in the US, and about 5 million computing professionals right now. There are 3.5m workers in admin assistant roles.
The growth in computing employment is totally overshadowed by parts of the workforce. BLS' "Management, business and finance" grouping grew by 19m since the early 80s.
Nobody knows what the equivalent to this is going to be until the economy starts reorganizing itself.
But even then, I would only buy that for the very short term, because AI is designed to (eventually) implement that step, too. As an analogy, I always wonder who is paying for these "how to use agentic AI" courses I see pop up all the time now. Literally just ask it! I asked Claude to build a course for me to get comfortable understanding agents and harnesses and it did a fantastic job.
They over hired and are still no where near their pre-pandemic numbers.
Look at this optimist over here thinking people will still have jobs to lose in 16 years.
Either senior talent leaves, people who are close to retiring, or just can find a job easily outside.
Low hanging fruits take the bait and head out.
Mid level people live in fear of either scared to find another job, or worried about layoffs.
Either way the company morale is down the drain for a long time, and a culture is lost.
Also Microsoft has already been trashing morale with year after year of layoffs. They probably assume this won't move the needle.
I always wonder about that with buy-outs. Seems to me that the people who take buyouts are either:
- those who are close to retirement
- those who have other options
I'd assume the first vary in quality the same as your overall workforce, but I'd assume the second would, all other things equal, be better than the average.
Maybe I'm wrong, but it seems like by offering an optional buyout, you'd degrade the overall quality of your workforce. Wonder if there are any case studies about that?
> To conclude, the company was able to specify who was dismissed but was unable to specify who took buyouts despite efforts to ensure retention of value employees, including careful setting of incentive schemes. The case presented in this paper demonstrates that employment adjustment using a buyout framework invites "adverse selection" despite careful employer precautions.
Here's the full PDF: https://econ-review.ier.hit-u.ac.jp/wp-content/uploads/files... (not sure how to translate that)
Are these offers extended to the highest performers with institutional knowledge?
In my experience, there were 3 main groups of people for whom these are attractive:
1) People who are close to retirement.
2) People who are leaving to become stay-at-home parents. So, basically retirement with more work.
3) People who are independently wealthy because they've been with the company forever and rocked the stock price appreciation. So, basically retirement with more money.
The amount of the buyout isn't really enough to move the needle for most other people because it usually doesn't include equity vesting. You're better off phoning it in and waiting for the layoff, because you get the same severance anyway but can continue to vest in peace until the axeman actually hits.
Folks who take the buyout do tend to skew heavily toward people with institutional knowledge, but it's also oftentimes folks who aren't really hungry and engaged with the company's current strategy. Basically folks who know a lot but don't work particularly hard. Particularly in times of big change, it likely does make sense for the company to get rid of these folks and rebuild the company in the image that they want it to be today.
That is not the kind of thing that inspires a person to stick around.
Very enticing Microsoft.
Snark aside, I wish you the best and hope you don't get laid off in the next round. Do good work, keep your network and resume fresh, and hope for the best.
Good question, and why limit this question to Microsoft? Why does COBRA have an 18-month limit? There should be no time limit to COBRA at all, especially if you have been with the same employer for many years. The law needs to be updated. Contact your elected representative.
For example https://www.wahealthplanfinder.org/HBEWeb/Annon_ShowIndividu...
First of all, it is not cheaper. It may be cheaper for young people because ACA marketplace rates are age dependent while COBRA rates are not. It is not cheaper if you are over a certain age, it is significantly more expensive.
Secondly, many ACA marketplace plans have narrower networks. (Which doctors are in-network doesn't only dependent on the insurance company, it also depends on the network, and insurance companies have multiple networks.) In WA, check out Regence's network for ACA plans--most hospitals are excluded, while their regular plans include them.
Unlike COBRA which almost always includes out-of-state doctors and hospitals, ACA networks don't. If you get a rare disease for which the expert doctor is in another state over you're out of luck.
And lastly, ACA rates just went up 20% in many states. If you are a couple in your 60's, you will pay nearly $45,000 for health insurance and then pay $7,000 each in deductible before insurance kicks in. At these rates, most healthy people will decide to forgo insurance. Which will reduce insurance company profits, who will then raise rates even more. This is a death spiral, and ACA will collapse (which is a desirable outcome as far as the current admin is concerned).
ACA is sometimes cheaper though! Depending on your age, and your income, and whatever politicians in your state are doing to throw sticks in the spokes (not that the ACA really needs any help to collapse, given what an intentionally-compromised, politicized mess it's been from the beginning).
I just wish that we could do a full redo of health-insurance portability with these simple changes: COBRA with zero time limits, and you can choose to apply whatever number of dollars the government(s) would use to subsidize an ACA plan for you, towards COBRA premiums instead. Next, allow employers to offer you pretax premium subsidies to use to pay for COBRA insurance from your former job so that if you take a new job you don't have to change insurance unless you want to.
I'm assuming health insurers would deeply hate all of that, since the upshot from all that is they'd have to compete with each other in the consumer market! They do compete today of course -- to get contracts from employers, but employers have far different interests than humans do.
Large employers are usually self-insured. The insurance company just manages the plan, but the employer actually pays the medical claims out of pocket.
Offering indefinite COBRA means absorbing massive medical risk for people who no longer work for you and aren't providing value. Healthy ex-employees leave COBRA quickly for cheaper coverage, while those with heavy medical expenses stay as long as possible—so the company gets stuck paying for high-cost claims while only collecting basic premiums.
While some companies let retirees buy into a group plan, that's an earned perk to reward long tenure. Indefinite COBRA would give that same lifetime benefit to anyone, even if they worked there for only six months.
> Large employers are usually self-insured.
They can choose to not be self-insured as well. This needs to be based on what is best for employees, not corporations.
https://www.cnbc.com/2026/10/26/microsoft-msft-voluntary-buy...
I suspect this VBO will see a lower acceptance rate because there will be a lot of eligible people in their early or mid careers, and unless you are one of the people who won't have trouble finding a new role, or you expect to be fired/laid off soon, or you're are already on your way out, you probably don't want to be starting the job search right now.
If you don’t take the deal now, you’ll spend your remaining days at Microsoft wondering if you’ll be included in the next round of involuntary layoffs, possibly with worse terms and timing.
Will the job market be that much better for you in a year or two?
I'd take the deal before it gets worse, and get a head start on hunting before there's even more people you're competing against. While you're at it, cash out some stocks before the index gets worse.
also Excel, but Excel's usability is being killed by sharepoint
"A computer lets you make more mistakes faster than any other invention, with the possible exceptions of handguns and Tequila." — Mitch Ratcliffe
If you really believe otherwise I encourage you to go have a chat with any one of a number of FOSS maintainers to hear their experiences pre and post LLMs.
Lastly, their "solution" to the crapfest, I fear, will be society footing the bill for "more AI" to "fix it". 95% of people will just accept that software has to be shit, and we'll all pay for it, while quality will be shown the door for being more expensive.
See also https://en.wikipedia.org/wiki/Order_of_the_Engineer
Argument is, it doesn’t matter if we can ship features and maintain them.
This is like watching the cryptobros all over again, except a thousand times bigger.
(Before they droll on: no, of course this take doesn't mean that LLMs are unimpressive and never useful. Only people in a cult take any criticism to mean that.)
I've done interviews where the person being interviewed just piped the task.md file in to claude and we sat there in silence for 20 minutes where claude completed the entire task. What is even the point. I preferred the people who did it all manually because at least I saw them understand something, I'm sure those people could also type "Claude, implement everything in the task.md" too.
But perhaps other interviewers actually do want to see you hand the whole task off and wait.
I dare you to say that to people making 50k a year.
AI stole our labor, is renting it back to us, and if you oppose you‘ll loose your job. This is blackmailing, plain and simple.
Hopefully sooner than later, so microkernel operating systems can...move right in.
Management will get a Golden Parachute but the white collar workers will be left holding the bag.
But do you have data or reusable anecdotal evidence that this is the case?
Given what is happening, it seems more likely they will wonder why they didn't push hard enough.
Whether you like AI or not, its hard to miss that its lead to hundreds of thousands of layoffs.
Now I don't know if I missed this feature in Claude Code or not but I don't believe it has technology for enhancing people's ability to sit around all day doing nothing. Correct me if I'm wrong.
Mass pumping out slightly dodgy code is more of a startup strategy.
Must you cultists always speak in this way?
With regards, someone "left behind" as the "singularity train" is leaving the platform. Or something.
Stop insinuating rejecting GenAI is necessarily irrational.
(Maybe my analysis will be different in the future but I will still know why I was avoiding it)
Are you sure the problem is the clankers?
There's no straw man, just bad faith.
It is unfair to expect me to back my claims against unsubstituted, obviously wrong insinuations (Brandolini's law).
But here you go:
Technofascism: AI, Big Tech, and the new authoritarianism [1]
Valerie Veatch traces the links between AI and eugenics in Ghost in the Machine [2]
Your AI might be able to answer itself why it is fascist.
[1] https://link.springer.com/article/10.1007/s00146-026-02862-9
[2] https://www.documentary.org/column/synthesis-valerie-veatch-...
However - calling AI "fascistic" simply isnt a self-evident observation. The concentration of power in Big Tech, authoritarian applications of AI, and making historical connections between eugenics could all be legitimate subjects of criticism. BUT NONE OF THAT ESTABLISHES GEN AI AS FASCIST.
Citing an academic paper and a documentary doesn't bridge that gap. You still need to explain which arguments you're adopting and how they support your conclusion.
People behind GenAI are fascists: for some it's obvious by now I hope (trump, elon musk). They are otherwise techbros who seek power and control other the world, and it doesn't matter if it causes harm [1] or a major economical crisis.
This thing has been brutally imposed onto us quickly and without debate, even if its explicit aim is to replace us. (The idea itself of being thrilled to design a system aiming at replacing human intelligence is a bit disgusting - with a very costly stochastic text generator no less! And the push to anthropolomorphize it is also disgusting).
LLM benchmarks are all rooted in eugenist (thus racist) pseudo science to measure intelligence, which of course biases them all towards these theories.
These tools of control are everywhere in all the aspects of our lives (work, culture, measure, institutions), which is another aspect of fascism.
They are built and run without care for the environment, pushing huge off-grid datacenters [2] when the people mostly don't want them, sometimes illegally cutting trees [3]. They are built stealing the work of everyone without our conscent, they hammer websites which incurs cost on the whole web only to sell it back to us through costly subscriptions (see also the ai tag jwz's blog, which I won't link from here).
Every aspect of GenAI is fascist. I wish it was hyperbole. I wish it was ridiculous.
[1] https://www.businessinsider.com/sam-altman-says-ai-benefits-...
[2] https://www.theclimatebrink.com/p/off-grid-data-centers-have...
[3] https://www.theguardian.com/environment/ng-interactive/2026/...
In this case it sounds like they are offering it to lower ranked employees (its own dystopian situation), but within that range of people, I still expect that Microsoft will lose more of the better ones.
• Fiscal Year 2026: $133.75 billion (up 31.34% YoY)
• Fiscal Year 2025: $101.83 billion (up 15.54% YoY)
• Fiscal Year 2024: $88.14 billion (up 21.80% YoY)
• Fiscal Year 2023: $72.36 billion
Seems like they can decrease workforce, make up the gap with AI, and increase revenue while doing it
If this doesn’t go well, we’ll see it in the form of more GitHub and Azure outages/breaches, and competitors filling the gap themselves.
The talented people that built and maintained those systems for the executives have to work somewhere.
Being prepared for bad luck is also something smart strategists prepare for, because they might not know what will or could happen, but they are ready for consequences.
Thats why we have fire stations and hospitals, because its smart to be ready even if we dont know when or why.
In sport for example, nobopdy says some team arent champs because they were lucky here or there. Luck is how things flow, lucky bounce, the weather, someone in the wrong place at the right time etc.
Their reports also tell us AI is very much in the negative.
They have experience and knowledge of the current systems. This would be lost. It takes many years to learn the in depth details of todays complicated systems.
Those years are worth millions for each person. It would take years for any replacement to become equivalent in the lost knowledge. Without this they will be making costly mistakes.
- bullshit jobs is a thing and many of these positions were make work anyways
- yes philosophically and economically, who will buy X product if all employees are laid off is a thing
- some of these will be rehired, some will be layed off if the voluntary buyout percentage is not large enough
- opinion: Microsoft as a company is a has been dinosaur, soon to be IBM, its (engineer) salaries were on the lower end and were very PM (Program Manager) heavy
- there is a lot of entrenched bureaucracy and top down mandates at this company.
- i personally use Macbooks/MacOS over Surface/XP, Google Docs over Word, GMail over Outlook, Slack over Teams, Firefox over Edge, etc. their user facing products are severely lacking in user experience.
- from my time in the tech industry/friends I understand their bureaucracy existing for the needs of the bureaucracy. their c-suite/leadership is a bunch of world salad morons
Server products & cloud services (39% of revenue) M365 Commercial products & cloud services, excludes Consumer (30.7%) Xbox / Gaming (6.6%) LinkedIn (6%)
[1] https://app.edgar.tools/companies/MSFT/disclosures/segments
I’m not claiming this is the most efficient way to get any kind of code written. But if you want to have one hacker sit down and ship the whole product in a couple weeks without any of these business dorks disturbing them, well, that’s exactly what brand-new startups are for.
This is why I don't use their products anymore, they aren't made for me.
>LinkedIn (6%)
Wow. I would never have guessed it was that high.
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/num...
Wouldn't those people choose to stay? Buyouts are much more attractive if you can easily get a new job.