Comment by donatj

It depends. Sometimes these buyouts are targeted towards groups that are toxic to the growth of the organization as a whole, like folks who have been around for a hot minute and have built up a cache of power but fail to use it other than for self-preservation or glory. I've worked in places where a handful of higher-ups nearing retirement block all progress because they refuse to learn anything new and are months or years away from retirement; in those cases, these buyouts can be quite good at eliminating bad actors and freeing up roles for those you want to keep around, but can't due to headcount limits or politics.

Do I think that's what Microsoft is doing here? No, not really. I think they're pulling an IBM - axing older workers generally in favor of younger ones, but done so in a way that won't result in a sueball. I agree with you that right now they need folks with institutional knowledge and experience to gradually hand over the helm to the next set of folks, and this isn't the way to go about it (that would've been all the previous rounds of wholly unnecessary layoffs).

It's just a way to juice the share price through performative restructuring, in my opinion.

I assume this voluntary retirement offer will be something like 2 weeks of pay per year of service, plus maybe 16 weeks. And you get to keep your unvested stock. If that's not too far off, you'd expect a principal engineer's gross expected value to be something like 800k from such a move. It seems like the net opportunity cost of accepting the VR would play out like:

1) you lose 1 or 2 million net, in the scenario where you would've otherwise stayed working 4 more years. 2) you lose ~200k net, in the scenario where you get another comparable job, but the job search takes 9 months. 3) you come out ahead if you were about to retire/get laid off anyway.

So, I don't think this plan is going to eliminate a random sampling of senior folks. The folks who accept this offer will tend to be ones that don't super enjoy the work itself, or ones that anticipate bad rewards or impending layoff.

In other words, I doubt it will be a sweet enough deal to entice the already-rich, high performing principal engineers, or the passionate nerds who are just there because they want to be.

>I feel like paying your most experienced employees to quit is exactly the opposite of what Microsoft needs right now.

I always felt thats the deal. But not a lot of people left the company when one was given, and we have rolling buys out now so people are trying to time buyout + a new job offer.

Maybe, but whoever are currently there aren’t making Windows 11 better.

No, once you spend that much time at a Big co, you start treating it like your own little fiefdom. Your allegiance becomes to how do I increase my own scope and not how do I build great products for customers ? Also “coordination tax” is heavy at big companies, it takes monumental effort to ship even incremental improvements. You have to inject new blood and move fast with the times. Your tenure doesn’t give you a birthright to stay at the company forever. This is not to devalue people who have contributed immensely to MSFT before, there are tenured people who aren’t afraid of change and adapt with the times. But someone close to their retirement might not want to rock the boat too much.

There’s a reason why despite investing so much in building AI tools, MSFT has a bad rep and no one uses their tools. People use CC, Codex, Cursor when MSFT already has supposedly competitive tools.

Note: I work at MSFT.

I'd think of it this way:

Folks who have institutional knowledge that is really critical to the company are likely treated quite well in prestigious roles and paid handsomely. If they take a modest buyout offer, it's probably because they were close to retirement anyway. Any truly critical role will have a succession plan. And if someone the company really doesn't want to lose signals they intend to take the offer without a credible succession plan, the company could just make them an even better personal offer to stay.

At the same time, I'm sure there are many folks who over-estimate how important their role and knowledge are to the company, especially to its future, which may look increasingly different from its past. Some of these people can become active blockers or political problems that are difficult, visible, and painful to deal with. Getting them to exit on their own is a win for the company, and it avoids the morale problem of visibly performance managing them or firing them.

Sounds like an issue for the next CEO when the current one takes their current parachute.

This is what really "AGI" is.

I'm laughing, having explained to my wife that if you are 69 and have worked there one year you are eligible for buyout/retirement.

The kid that started at 10 years old though, there for the whole 51 years: sorry, in another 9 years you will be eligible.

Hilarious that there is an algorithm.