Comment by christophilus
17 hours ago
My former boss at Microsoft told me this sort of thing is a good way to get rid of your best, most employable employees. I guess he didn’t pass the memo up the chain.
17 hours ago
My former boss at Microsoft told me this sort of thing is a good way to get rid of your best, most employable employees. I guess he didn’t pass the memo up the chain.
The truth of the matter I think is that you do not actually need the best.
Most of the time, anyway.
As far as business is concerned, the thing often runs better with mid people with less leverage. They just do their job, don't have any ideas and you can squeeze them.
Because it's not all the best that are leaving. Just the ones not stuck with a mortgage or similar stuff. This cuts the wings of very capable people and completely strips them off their bargaining power. Which is very useful to management.
> The truth of the matter I think is that you do not actually need the best.
Not all employees need to be the "best". But if you are a top tier company in a given field like Microsoft, you need the best minds to stay top tier, otherwise you will descend. But on the other hand you don't need the lower tier performers to stay top tier except for scaling reasons because the supply for top tier performers is a very small pool...
You can still keep some of the best minds, but you do not need them on every team and every project.
I might be wrong, but I doubt that these mass buyouts were also offered to those that are strategically relevant. Though I guess that can happen if that specific branch of the management tree is bad at their jobs
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What management thinks is good and what employees, especially engineering type employees, think is good are usually counter.
The execs want to run the most profit to cost they can squeeze out, usually short term. The employees see the value in the senior and knowledge rich staff with higher costs long term.
Arguably, management might be more often than not more right in their assessment.
Which hurts me to say. But engineers tend to make for terrible businessmen. (There are exceptions of course, and the opposite is _even worse_)
That is a rule for a good project manager. When work is simple, you don't need bright people. You just need average guys. But when work is cutting edge, you need very talented people.
I think the efforts on cutting edge works has been reduced and redirected to more market-dominating trends like LLM optimizations. This is a bet. Cut off the finger for a stronger arm. And I think this bet will fail. But I thought the same about this new Gemini after Bard, and boy I was wrong.
Companies want to get rid of the bottom 25% of the employees at all times. These offers often get taken advantage by half of those and half of others who are more capable & find it opportunistic to do something better. If that latter half had stayed, they would have outperformed their pay. If the company needs to re-hire that lost output in employees, it's a net negative. If they can guarantee that the ones who stayed plus AI outweighs the time to onboard and institutional knowledge lost, sure seems reasonable but high risk for a large company that is allowed to play it safer.
I think by now companies are not under any illusion that they can precisely pinpoint bottom 25% of employees. Their reasonable efforts are about separating out few folks they absolutely want to keep in business continuity sense. Rest below average, average, above average, "best" are fair game.
> The truth of the matter I think is that you do not actually need the best.
That is true for monopolies. Once you get a monopoly, you do not need to compete anymore. Lower the salaries. Make products worse. Increase prices. Monopolies do not need to care. We used to break them because that. Nowadays, bots just will tell you that they are monopolies because they are "so good". So, here we are.
This is true if you are running a car wash. Even the mid tier employees satisfactorily do the job and customers can be given what they paid for. You are competing on geographic location and ability to do a very easy task repeatedly over and over. You get another chance to sell your product every single day, and you can adjust your prices up and down to find the sweet spot because the sales cycle repeats every day.
It is not true if you are determining the correct feature to add to microsoft's money making products. That requires deep knowledge of users and the industry and the existing product. It requires understanding the industry and users far in advance, the turnaround time for a feature in Windows or Azure is likely 6 months or longer, sometimes years. It requires acumen and an ability to think about customers and the market and sales. Microsoft doesn't have 5000 people who can do this. They probably don't have 1000. These people can go start their own business or consulting firm today. There are lots of people they worked with in the past who know how good they are so they can get another job.
The same is true for engineering. Out of 500 engineers, there are 10-20 that are doing the really important work that you can't just find someone else to do. They know everything about the system and everyone comes to them for advice or to get explanations about how things are put together and why. You can't just find some average engineer and put them in the same desk as these 10-20 and magically things are fine, the mid tier person doesn't have the years of experience nor the potential to fill this role even if they did have the experience.
> That requires deep knowledge of users and the industry and the existing product.
I.. uh. I hate to break it to you, but that's not as deep of a moat as this reads like you would believe it is.
Engineers (like me, fwiw) would love to believe all these things about themselves, but they're not really true.
Of course, there is a difference, but the difference just doesn't matter all that much in the real world. Markets do not care.
Which isn't to say that people shouldn't know their worth. But it is to say that one can better defend their worth when armed with an accurate assessment of reality.
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I dunno how prevalant this term is, but people at my last robotics company called it the "dead sea effect." Those who can, leave. Those who can't, hang on.
It didn't seem that obvious a term as you described it here, but a bit of googling gave the background:
It's effectively that the more desirable elements leave, the less desirable parts stay behind and get more concentrated... So the bad employees are the salt in the dead sea
It was coined by this chap https://en.wikipedia.org/wiki/Bruce_Webster#Career
MS did a round of layoffs that was specifically targeting low performance last year: https://www.cnbc.com/2025/01/08/microsoft-confirms-performan... and there's no reason to believe they wouldn't do it again. I doubt that anyone there is unaware that hanging on isn't a realistic option if they're not delivering.
You get the same with government jobs. Anyone smart leaves and gets a better job, so you’re left with the dregs.
I termed it "Sh*t floats" when I was in the Navy.
My dad told me his bosses were very surprised when he eagerly accepted a similar deal. IIRC, he was about 60 at the time, so would have had about 6 years early retirement given what the pension age was back then.
Well they’re the ones that cost the most money!
They're also the ones that create the most money.
Ultimately, you can only take equity away from people like that for so long. We're taking the people who actually create the value and firing them so that we can satisfy the hangers-on, meaning shareholders who often 1) don't know they even own MS and 2) are often diversified as to make a real problem with Microsoft not a dealbreaker for their financial goals.
I guess unfortunately there isn't an easy way to just "only fire the employees responsible for making Teams suck".
In theory that's a manager's responsibility, but managers get (effectively) punished for firing people so that never happens in practice.
This is why it was only offered to 60k people. The best performers are likely not given the option.
there’s a difference between a memo passed and a memo read. (let alone a memo acted upon.)
Market is horrible even for 'best employees' . Best employees arent that different from mid employees these days because everyone is slinging the same slop.
Not true, the market is exceptional for the best in tech. The problem arises when some employees think they are the best - despite the facts not lining up.
I don't believe you. I literally can't get an interview, but I joined a mature startup through a subcontracting gig to make ends meet, and a month in they're asking if they can just hire me. The hiring process is broken.
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Are you one of the best in tech?
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9 figure signing bonuses are a horrible problem to have
Yes and No. If you are a citizen and have “AI” experience there’s plenty of startups offering base salaries in excess of the average Microsoft total comp.
Maybe something has changed between now and then? Say, some kind of a technology that allows to select eligible employees better.
Definitely not. We are no better at finding good employees than we ever were. It's the human biases that make it bad, not the technology.
"We" as in "industry in general" or "we" as in "HR at my company"? Although, I'd be more interested in what Microsoft does.
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