Microsoft is reportedly preparing for another round of layoffs by May, with the primary focus on reducing middle management and non-technical roles. The aim is to improve the ratio of engineers within project teams and streamline operations. This restructuring move reflects a broader tech industry shift where companies are trimming excess layers and concentrating on technical capabilities.
Microsoft is said to be exploring ways to increase the “span of control” for managers, meaning each would oversee a larger number of employees, thus flattening the hierarchy.
Performance-Based Cuts and Team Rebalancing
Sources suggest that Microsoft may target employees with consistently low performance scores—specifically those with an “Impact 80” or below for two consecutive years. Earlier this year, the company laid off around 2,000 underperforming staff, and this next round may follow a similar performance-based strategy.
The initiative is reportedly being led internally by Charlie Bell, Microsoft’s security chief and a former senior Amazon executive, who is focused on reducing the “PM ratio”—the number of programme or product managers compared to engineers on teams.
Also read: Microsoft Pauses Data Centre Growth Amid AI Rethink
Tech Industry Mirrors the Shift
This internal reshaping mirrors similar moves by companies like Amazon and Google. Amazon’s “Builder Ratio” approach and Google’s 10% reduction in management roles reflect the trend of favoring engineers who directly contribute to product innovation.
As tech giants increasingly compete in areas like AI and cloud services, a leaner structure with a higher concentration of technical talent is being viewed as essential. While Microsoft has not confirmed the layoff reports, the move aligns with industry-wide efforts to optimise workforce composition and drive innovation more efficiently.
