We Need To Talk About The Tech Layoffs

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Hey folks, we are going to the comments today from a comment from Skyrim Beast and it's great to see, you know, people that stick around the channel and stuff. It's one of the reasons it's really fun to make videos on this channel is there's like definitely a community. So, I really appreciate that and I never want to lose that, especially if this channel gets really big. That would be super cool. But, uh, definitely want to keep the community. So, Skyrim Beast was checking in. uh they haven't been here for a little bit which is totally fine. Obviously people got lives you know code commute is not the center of their universe and that's totally cool and they're kind of curious about the recent Microsoft layoffs. So uh I figured this would be a good topic to go over.

I have started more recently I would say having some conversations with employees um you know because there can only be so many layoffs before people start to get like you know curious um so I've been talking about that with employees I've been talking I did a little bit of discussion about this on the live stream on my main channel Dev Leader so uh that's every Monday at 7:00 p.m. Civic and uh that was something that came up on the live stream as well. So I'm basically going to kind of uh resummarize the things I talked about there. When I talk to my employees directly uh I give them uh a little bit more of a detailed view uh just because we are within Microsoft and I have a I don't know like it's a it's a more tailored sort of discussion to those individuals um that that have been curious.

So, I'm not giving you the exact same um you know, messaging, but at the high level and everything is is the exact same. Just for what it's worth, I like to be transparent, right? So, I'm letting you know that when I have those internal conversations, there's just a little bit more detail because I can talk about more specific things as it pertains to people on my team, but I'm happy to like to share perspective on this um and uh and chat through it. So, I wanted to start off by saying like, "No, I don't think that layoffs are a good thing." So, as we're going through this um and I'm sharing my perspective on like here is why they happen or here is my understanding.

What I'm not trying to do is defend the layoffs just for full disclosure because I feel like if I don't say this, you know, very loud and clear in the beginning of this video, if I go to start explaining like reasoning behind it, then people are going to freak out, right? I do not support layoffs. There we go. Okay, with that out of the way, um I will talk about like my understanding as to why they happen, things like that. And um Skyrim Beast was asking uh sort of the the question really was, you know, do I plan on staying at Microsoft? Like is that, you know, what I see in the the foreseeable future for me? So, I'll kind of get to that towards the end.

Um, so to kick things off, I guess, yeah, the more most recent round of layoffs that I'm aware of that were kind of in the news and stuff, it's around 9,000 people that were like, "Oh, uh, that's obviously a large number of people." Um, I think that people like, again, just not supporting layoffs. I do think that people sometimes see a huge number like that and also do forget that Microsoft is like an outrageously large company. Don't get me wrong, 9,000 people is a lot of people, but when you start looking at like the overall number of employees, it's not like they laid off half the company or something. There's hundreds of thousands of employees. So, um, again, not not supporting layoffs. It is. It's a significant number, but I I do think that people forget like relatively that's not a it's not like a large percent of Microsoft's workforce.

Just to be transparent, one of the things that comes up in these conversations is that um you know, from being on the outside, right? It's like, well, Microsoft is pushing co-pilot. It's everything's AI. Um the the automatic thing that we get is well Microsoft must have laid off 9,000 people because they're being replaced by AI, right? It's it's the AI hype. It's the AI fear. You know, everyone's obsolete. There's AI. Look, Microsoft is out here getting rid of people because they have AI to replace them. Um I don't have the specific details, right? Like cuz I was not part of that. Um and even if that was in my sort of same organization, I wouldn't be make the one making those decisions or anything. So um but with that said, from being on the inside, I can tell you with a high degree of confidence, there is not AI that is replacing people.

It just ain't happening. Okay. Um, it's not like someone was like, "Hey, we built an agent that does, you know, the same thing as these roles that were that were let go. Uh, so we don't need the people, right? AI replace them." It's just not happening. That's not what it is. It's simply not. Um, because there would be a lot more discussions internally about people going, "Holy crap, like you know, you see this stuff like it's that's just not the case." So, um, when people freak out about this stuff being, uh, caused by AI and AI replacing jobs, that is just not correct. Simply not correct. Now, beyond that, if you want to say it's related to AI, that's where I would say I could see that being the case, but not because AI is taking the jobs. Okay.

So if we back up a little bit and this is going to be my understanding of how these types of things happen in an organization that's as big as or like a company as big as Microsoft across organizations. Okay. Um again if someone's watching this if you've worked at Microsoft longer than me and you know inside details to correct me please do. I'm sharing with you my understanding of this. I never mean to come across as like I am the definitive source of truth. You, you know, must be wrong if you disagree with me. That's not my intention. But my understanding of this is that it's not like SA sits at the top and goes, well, time to lay off 9,000 people. Um, right. It's everything is, you know, immensely driven by it's a publicly traded company, right?

So shareholders uh as a company it's literally a business the the goal is to like for shareholders is to make money right that's the goal of shareholders now how you do that will be different based on the company and for Microsoft it's empowering every person on the planet right it's like a planetary scale mission statement. So that's like Microsoft has tons of things that contribute towards that. So that's how you do it. But at the end of the day, it is a business and businesses don't succeed unless they're profitable from a shareholder perspective. Okay? So if there is a push to be more profitable and I will stop one more time to say I am not supporting layoffs. Try to explain my understanding as to how and why they happen. If sorry one sec let me switch lanes here. If this situation comes up where it's like okay we need to have better margins there needs to be more profit.

You achieve that if I oversimplify it basically by doing two things. You increase revenue without increasing cost at the same rate or you decrease cost without reducing revenue at the same rate because the difference between those things is going to be your profit. Now the understanding that I have of this kind of thing like I said is not that Satia goes okay time to go like you know fire people from the company. Um my understanding is that basically this gets sort of delegated to business units within the company and the leaders of those business units. Now they are not told, my understanding is they're not told, well time that you go fire people. They are given the instruction that it's like we have profit goals that we need to meet and it's within your responsibility within your business unit to figure out how you're contributing to that.

Okay. So if we think about this, if we put ourselves in the shoes of someone in this position, you are tasked with make more money or reduce cost. I suspect and again not supporting layoffs but I suspect it's probably a lot more difficult in terms of a shorter term solution to be able to say ah we need to generate more revenue. No worries without increasing cost. No worries. Got you right? like next week, next week we're going to ship thing X and like that's going to drive revenue up, you know, 20%. So there we have it. And I I think that this is a more unrealistic thing because if you were able to very quickly create more revenue, like why would you not have done it truly?

like unless something was on the cusp of being released like a big launch of something like I don't know like but statistically speaking I just feel like it's a harder thing to be able to go no problem in a very short amount of time we can increase revenue. I'm not saying it's impossible. I'm not saying it doesn't happen. I'm just saying I feel like that is a decision that would be like it's almost like you don't get to make the decision. You have to have something available that's going to do that. If we look at the other path which is reducing costs, what seems like the most straightforward thing to do doesn't mean it's the one that I support. I'm just saying if you have a short amount of time and you need to reduce cost, what seems like an easy path, easy. It's probably letting people go.

It's probably and not even when I say letting people go, it's not even the way that I would imagine that happening. Um, it's like looking at parts of your business and going, "This part of the business does not generate revenue. It's costing us Again, this is like a very simplistic way to look at it, but if you need to cut costs and you have parts of your business that literally cost you to run and they're not generating revenue to make up for that, you might go, "Okay, time to get rid of that." And the side effect of this is that it is so like dehumanized, right? It's not It's not like they went to the individuals and said, "Okay, like we're going to find the people that, you know, you don't really want to be here. You're kind of like burnt out and you don't really like Microsoft anymore.

No problem. We'll make it easy for you. Time to go." Um, and oh, you've been here for 25 years and you're amazing. Like, okay, we'll make sure that we can get you transferred internally. It's completely dehumanized, right? It's just like this part of the business doesn't exist. Bye. Again, I'm not saying that that's a good thing. I'm just saying that I'm trying to rationalize how it happens based on my understanding of like the responsibility. And honestly, I think that like as much as I hate that, I think that there's probably ways that if it had to happen like that, we could do a much much much better job, right? It's like it it to me it like don't get me wrong, anyone being let go, I'm like, man, that really sucks. And especially because I'm quite confident has nothing to do with the person. But then I also see people that have been at Microsoft for like 20 years.

There's people that I know like not sorry not personally but that I know of that are like I don't know if you can even say like a programming celebrity but like they're known within a community of developers, right? People really know them and then like they're let go and it's like how the hell how the hell are you going to get rid of that person, right? But it just goes to show you that it's not it's not even at the person level. It's just like groups gone. So I think if there needed to be some type of downsizing or anything like that, the part that gets crazy for me on top of this is that there's still hiring going on. So, could we not do a much better job of saying like, hey, if we need to get rid of this part of the business, how do we make sure that we keep all of that talent and move it to the other parts of the business that are hiring?

Like, hiring is inherently a risky thing. You're taking a chance on someone coming on board. And if you have people that are working at the company, they've been there, they've been killing it. What? They've already been vetted. Sure, it's going to be a different domain, but like or potentially a different domain. I shouldn't say that's even a guarantee, but like would there not be this better opportunity to be to do internal transfers? Um, I wish something like that would exist because seeing the hiring happen at the same time as layoffs, I'm like, this just feels silly. Now, I suspect this is largely because of how enormous Microsoft is and the fact that there's different organizations like within the like within the company. It's almost like every organization is its own company. It's huge. I'm I'm speculating about that part though. Um but I think it would be so awesome to be able to um to do internal transfers.

someone listening to this is going to say, "Oh, no, that's because what they can do now is that they can fire the people and then they can hire in at a cheaper rate." Um, just a heads up, this is not like layoffs aren't a new thing. And if you wanted to try and make that argument a few years ago, you would be completely wrong. That hasn't changed. But what has changed is that people's perception of this stuff, right? It was a super hot market a few years ago for people trying to get jobs. So they'd be coming, you'd be hiring like it's a it's a well-known thing that like statistically when you're hiring people in, they're getting paid at competitive rates in the industry and then people getting hired in are getting paid more than the people that have been kind of like leveling up. It's this is what happens.

And then periodically there needs to be adjustments because the rate at which sort of competitors are going up. Uh this is not a Microsoft specific thing. This is even happened where I used to work. It was a startup completely different space. Now, right now, like I don't know if it's uh if things are flipped the other way in terms of competition and it's not as um you know, people's pay is like less aggressive or whatever in terms of the comp that they're being offered. Sure. But like what I'm trying to say is like layoffs happen before and this happened the same way where there's no internal transfer. So your your reasoning is incorrect to say that it's just to get cheap labor. It's just not correct. So, this is my understanding as to why these things happen. Um, and I'm going to shift gears a little bit to talk about some different perspectives on this stuff.

So, um, I work in a part of Microsoft that's called Substrate. And that's sort of I don't it's not like a code name or anything. It's just internally referenced that way. But Office 365 is a suite of products for Office and um Substrate is the entire platform and ecosystem that these products and services are built on top of. So Substrate is the platform itself. So since I've been at Microsoft for the last just under 5 years now, I've been working on Substrate. I used to work on the deployment team for Substrate and now I work on the routing plane for Substrate. My perspective on this stuff is that platform teams uh in terms of like job safety, this kind of thing. I feel like platform teams are in a very good position for that. Um unless unless you're on a platform team that happen to do like absurd overhiring or something.

Uh, I don't know any platform teams at Microsoft that are like, "Oh man, we have so many people, we don't even know what to do with them." It's it's quite the opposite where it's like, "Oh crap, I wish we had more people to get more stuff done." Right? There's lots of really important work as a platform team. It's not that other teams don't have important work, but as a platform, we have to support them. So if we were to compare a platform team to a feature team then something like a feature team I think is going to get a lot more association to like are you generating money or is this costing us? So I don't have stats on this but I feel like feature teams um or like you know you're building a service that's supporting a feature in a product. I feel like these types of teams are probably riskier from that perspective.

Again, I don't have data on that, but when layoffs and stuff happen, I have I have never felt at risk. That's not again not because I I think I'm good, not because I think that like I there's nothing about me that's special in this. It's just that I've been on platform teams and if the platform teams cannot support all of the other services for our ecosystem then we have a really big problem then it doesn't matter if you have platform teams or sorry it doesn't even matter if you have uh feature or service teams because there's no platform to support them right imagine there was no deployment cool you go build a new feature service for a new feature Okay, it doesn't ship. It's not deploying. Doesn't go anywhere. So, get rid of that team then. You don't You're trying to ship something new. We don't have a deployment team.

Okay. If we didn't have a routing plane or a team to support that, like that's all of the traffic for Office 365. You'd be screwed. So, like the platform teams I find are I'm not saying they're bulletproof. There's no way that you can't get laid off from that, but I have felt very safe being on a platform team. Um the other thing especially now on the routing plane is like we do a lot with security like a lot of work with security and security is one of Microsoft's most important things because if we are not secure then customers don't trust us and if we don't have trust from our end users it's game over. It's the most important thing. Customers need to be able to trust us with their data. They need to trust us that we can deliver for them. that their data is secure.

Um that it's uh what's the right word for this? Uh available, right? Like they're not it's just not going to disappear kind of thing. If we lose that trust, we lose our customers. So security is an enormous part of that. And I get to participate in a lot of security work. So again, if security is one of the most important things for Microsoft and that's a big thing that we contribute to, I feel like they're not going to come around in in our organization and say, "Hey, like we got to let go of the team." So like we'll see you guys later. It would everything would fall apart. And it's the same for the other platform teams. By the way, I'm not saying that like ours is special in some way. as a platform team, we are essential. Now, doesn't mean that there couldn't be layoffs where they're like, "We need to downsize the teams." I'm sure that could happen, but my understanding is that this is handled from the business leader perspective.

So um I'll share a couple more things I shared on the live stream uh on dev leader and this is just like you know uh I feel like we have really really good leaders in our organization by the way they don't watch my videos so um I'm not like trying to kiss butt here or anything like they'll never see or hear that I'm try like that I'm about to say positive things about them. This is just my genuine response and like this is going to start to answer Skyrim Beast's question that was like are you planning staying at Microsoft kind of thing. So I think it was a few years back when there was some layoffs. Um, we had one of our leaders that was uh doing a panel conversation or like a I can't remember exactly what the format was in the forum, but

they were having a conversation with I feel like either all the managers or all the all the principles in Substrate and there were people that were asking about the layoffs as as they should, right? And they're like, "Hey, like what the heck's happening? Like are we all at risk?" And um I like I remember our leader saying that uh like at that time in particular they said like hey like as my understanding is like you know from everything that they're aware of they're like we're not affected but they also said that they're like I can't sit here and tell you all that there will be zero layoffs in substrate. And they said, "The reason I can't say that is because like what people often don't realize is like there are like micro or individual layoffs that happen, you know, at different points in the year, right?

To say that like if they're going to say, "Oh, there's going to be absolutely zero." They're like, "I can't sit here and tell you that. That would be a lie." But in terms of like these bigger sweeping layoffs and stuff, they said at that point they're like, "Look, we aren't affected from that." But I I won't sit here and tell you there are zero throughout the year because that's just not it's just not like real. So, I could really appreciate like the transparency around that to be able to say like, you know, they're not going to sugarcoat it, but in terms of like the sweeping mass layoffs, they were like not certainly not in this round. Um, so anyway, thought that was interesting. Uh and then another sort of point around this is that this goes back to what I was saying around like the the organizational leaders like the business leaders being able to make decisions about this stuff.

Um without getting into details, you know, we've been we've been told that the the leader for our org um has done a a bunch of things like they're very cognizant of like the impact of layoffs and they've done a put a bunch of things in place. They have like uh what it's more than a philosophy like a strategy I guess that um that really helps curve the need for layoffs. So when there is this sort of situation where it's like hey got to got to cut cost or boost revenue um that they don't have to lean into like oh crap okay like got to start getting rid of people. Um so that includes a whole host of things but just to give you like what does that even mean? Like I can give you one example at a high level but like we don't aggressively overhire in our org.

We hire really slowly. Sometimes it feels painfully slow, right? Sometimes it's like, man, like it would be really nice if we could just get an extra person to help with this. And it's like, look, we're pretty strict on this. So, you have to have a pretty like extreme case because of course to every individual team it's going to seem like the most important urgent thing in the world to get an extra person to help. I don't know a single team that wouldn't love extra help. But the problem is if there's that many teams and everyone does it, then the costs start to balloon because we might overhire. So this is just a super highle example, right? But being able to hire slowly or more slowly um is actually like helpful in this case.

the same thing like if people are leaving it's like do you really need the back fill right so there's a lot of things in place for our organization strategically that make it so that we are not going over the top and overhiring and sometimes that can feel painful but the reality is like it forces us to aggressively prioritize right we have to be transparent about like with our leadership, hey, like without more help, we can't get X, Y, and Z done. And we go from there. Then they're able to make decisions and say like, okay, that's actually a super critical thing. We need that. We should come up with a plan. So, um I just I wanted to share that even though it's like super high level because I thought like when I got to hear stuff like that that makes me feel better, right? It's not I'm not saying that the other business leaders must be or something like that.

I I can't imagine being put in that position. Um, and I'll come back to that in just a moment, but I can't imagine being put in that position and like being responsible for a bunch of people being let go like that. I don't like that. So I I do really appreciate that um you know even if I don't know all of the details and all of the strategy and whatever is put in place that um that it's a very cognizant conscious thing to be able to come up with different strategies for uh sort of reducing the impact of layoffs or avoiding it altogether which is great. Um, okay. So, yeah, I've had more people coming, you know, uh, employees coming and talking to me about this more recently. So, I've been sharing them with them like a similar sort of message that you're hearing now. But, um, the question that Skyrim Beast has is like, do I plan to stay at Microsoft?

Is that a thing that I have for me in the foreseeable future? The answer is yes. Um, I don't agree with layoffs. Um, but it's not to the the point where I'm I'm going to try and make a stand to leave the company because I don't agree with layoffs. That's not a hill I'm like a hill I'm going to die on. Um, I don't agree with it. It's completely unaffected me. Um, and that's I like I said, I tried to rationalize why they happen. Doesn't mean that I agree with it. I didn't want to get behind this dump truck. Ugh. But, um, again, it's not to the point where I'm like, I'm so against this that I I cannot be at this company because I'm going to go to another company and it's probably going to be a similar thing. Um, so it I don't know like I I don't I don't feel like me like trying to make a stand for it is having any net positive change.

If anything, it's just a bigger pain in the ass for me to be like, well, I don't like that. I guess I should go to a different company now. That's a ton of stress for me. So, no, I'm not I'm not leaving because of that. uh and we've been very fortunate like I said for being on a platform team being in a good organization that uh that we have been safe from layoffs. Now the thing that I did say on my live stream and this is like if the conversation had to happen I the reason I'm okay saying this on a camera is because I firmly believe in this. Um, no one has ever come to me and said, "You got to get rid of some of your team. You got to stack rank them." We didn't talk about stack ranking. That was another thing that's come up in the news and stuff.

Uh, pips and stack ranking. I think I made a video on this before, though, I think. Um, sorry, people were trying to move over, but then not actually moving over, so I figured I would get out of the way for them. Um, so I I'll I'll include pips and stack ranking into this conversation. So, no one has come to me at any point and said, "You got to stack rank your team." No one's come to me and said, "You got to call the bottom 10% or some number." Um, and the whole PIP thing, just to touch on it, because I I think I've made a video on this before, the PIP thing is not what people are making it out to be, cuz people are like, "Oh, the stack rank then you're put on a pip and then you're managed out." No.

Um, without getting into the exact details on how this is communicated and whatever else, the entire message that managers were given was if you have employees that have been marked as underperforming for over a year straight, there's going to be a conversation with you. And I think that totally makes sense. If you have an employee that has been marked as underperforming for over a year, you're either not doing something about it and we need to go figure that out or you are and it's not working and we need to go figure that out. The other option is that it is starting to work and that's great. Great news, great success story, awesome stuff. But the point is that around a year, if things aren't getting better, there's got to be a conversation. And I fully agree with this.

if uh you know if this wasn't something that was discussed I like this is I feel like if you're waiting a year before that conversation even comes up like I don't I don't know what to tell you. It's a huge missed opportunity as a manager to wait that long before even a conversation started. So that's the it's not like go stack rank the team and then put people on pips to get them out. It's like if you have underperforming employees that you've identified and started conversations with, what are you doing about that? Because if you're not helping them and helping them can look different ways, right? Like you can either be coaching them on different things and I mean at some point helping them if that's not working, helping them can look like, okay, do you need to be on a different team or perhaps Microsoft is not for you?

that can be helpful even though it doesn't seem like it to them. So, um if I did have someone come to me and I would be very comfortable to say this to my skip level manager, he actually might watch one of these videos. So, who knows? But um you know I would or my manager I don't think he'd ever watch these but um I would feel very very comfortable saying this to them which is why I'm happy to say it on a camera but if they came to me and said hey look we need you to stack rank your team and you're going to have to take whatever percent it is or however many people stack rank them in the bottom those uh you have to go fire those people or pip them or um to meet some quota. I would tell them either couple things.

One is just outright no, I'm not doing that. And then they could keep telling me I have to, I have to, I have to. And then they could decide if I'm not performing well because I'm not doing that. But I'm not doing it. So that's up to them. If at that point they want to go, okay, well this manager's being a piece of crap and not listening to us. Got to get rid of him. Okay. The other alternative is I tell them no and you know they can if they need their quota to be met then they can start with me and I will leave because I'm not doing it. And that is me dying on the hill because once that involves me to go do that to make that decision and to do that sort of activity that I don't agree with then I'm not working there.

But no one has ever said that. No one's ever come close to saying that. But that would be the thing where I go, "Hey, this place ain't for me then. That's okay. You can get someone else to do that. And if you really need to save the money, no problem. Start with me. I'll make it very easy for you." But I'm not doing that. cuz I don't agree with it. Um I think that's just like a like a moral thing for me. It just it doesn't align with me. So if you're listening, you're like, "Well, why why not?" Like maybe it makes sense. Like you got bad people at the bottom, get rid of them. Like if I had bad people at the bottom, I don't need to stack rank my team to call some percent of them. If I have bad people at the bottom, I'm already having conversations with them to try and make things better or we're already working on what's next for them.

I don't I don't need an official process to stack rank and callull people. Like, nope. Don't need that. I'm not doing it. So, if that ever happens, I will leave. That's fine. Not for me. But that is nowhere close to where we're at. Um, you know, and I want to be very transparent here. like I've been I feel very supported by my manager uh my skip level manager in terms of like you know being able to like do rewards for the team, promos for the team, that kind of stuff. Um I have no complaints in that regard. Um they have always been very very supportive on that stuff. So it's it's like quite quite literally the opposite. So, that's my take on this stuff. I hope you found that helpful. Um, I realize it's a hard conversation. I will finish this by saying, you know, I do not support layoffs.

I don't think that's the right thing to do, but that is my understanding as to how they happen. So, um, friendly reminder that this channel's driven by questions that you have. So, if you would like, leave questions in the comments. I'm happy to make a video response. Otherwise, if you want to be kept anonymous, you can go to codemute.com. You can use the forum there, send in your question or you can message me on social media. It's just dev leader on any channel that you want. And I will see you next time. Take care.