from Hacker News

The Broken Microsoft Pact: Layoffs and Performance Management

by dshacker on 7/6/25, 10:54 PM with 100 comments

by hackthemack on 7/7/25, 1:50 AM
I wish people were not so adverse to unions. The company will never be your friend. You will almost never have much leverage over what the company wants to do. The information you have will most likely be very asymmetrical to what the company has insight into, putting you at a disadvantage. Unions are imperfect. Unions will have its own inside politics. You will pay a union fee.
I think humans are fundamentally flawed in not being able to see alternate history. If they have to pay a union, they will not see all the benefits, and only focus on the 50 dollar union fee.
by wenc on 7/7/25, 1:39 AM
Most financial advisors tell you to keep a rainy day fund with a 3-6 month runway.
Given what's been happening in the tech industry and the economy at large, I now keep a 1-year emergency fund in a money-market fund at 4% (Fidelity SPAXX). I'm probably losing out on some growth (SP500 grew 11% over the past year, despite the massive drop in April 2025), but at least I have liquidity in case I get laid off.
That's the kind of game I feel I have to play these days.
by ThrowawayB7 on 7/7/25, 1:43 AM
This overlooks the 2009 and 2014 layoffs and the notorious Mini-Microsoft blog, still up over 15 years later(!), where they were discussed. The notion of a "Microsoft Pact" is absolute baloney but, had there been one, it was broken back then, not anytime recent.
by int_19h on 7/7/25, 2:10 AM
The notion that layoffs are something new at Microsoft is weird. I joined it in 2009 in the middle of a large layoff, and I've seen several more over the 15 years I've spent working there. E.g. almost 8k people were gone back in 2015.
Nor is it something unique to them. As far as I know, the only large US tech company that didn't do layoffs in the past decade is NVIDIA (their last one was in 2008).
by xivzgrev on 7/7/25, 1:17 AM
As a manager I’m going thru performance management myself. It’s a hard experience.
What I learned is: you need to hold a high bar, because people can do anything to keep their job, and often not what you want them to do
What you want is someone who is open to feedback, understands it, and takes effective action.
Outside of that, there’s a whole gamut of people. Some get defensive. Some are politely open to feedback but don’t actually try to understand. Some understand but don’t care enough to follow thru. And some try hard but aren’t effective. All of that is bad for your team, and unlikely to change. Just need to cut your losses to open your seat for someone who can do it.
The current person i have is open to feedback, but doesn’t fully understand it and doesn’t care to. It’s like dragging a horse to water. After doing that for six months my manager pointed that out, it’s just not a good fit. I like to see the best in people, and even a little bit of improvement gives me hope. But it’s dragging down our team potential. It’s a hard truth.
by cjbgkagh on 7/7/25, 2:49 AM
Paying 35% below market and promising security to those willing to believe it is a sure way to slowly brain drain the company. People forget how dominant Microsoft used to be in tech.
by saagarjha on 7/7/25, 12:36 AM
Google had the same "no layoffs" vibe too, and they paid better. Turns out that everyone is willing to do layoffs.
by Oggle on 7/7/25, 12:28 AM
Microsoft definitely does underpay the market significantly! Like 60% of what other companies of the same level pay, unless you're in the Copilot org. Maybe you'll get a little bit higher.
by endemic on 7/7/25, 12:39 AM
I’ve never worked at Microsoft, but the author’s three takeaways is how it’s always been for other companies.
by steveBK123 on 7/7/25, 12:10 AM
I never took implicit “they pay less but it’s more chill” culture stories seriously. You can classify certain job functions this way more readily than company wide cultures.
by msteffen on 7/7/25, 1:19 PM
> This creates a system where companies find it easier to fire good employees in bulk than to fire bad employees individually. The legal protections meant to prevent arbitrary termination end up enabling exactly that
I have some passing familiarity with how (California) law firms approach firing, which this article gave me cause to consider:
- they do fire unproductive people aggressively (law firms bill by the hour and attorneys are very expensive to employ, so it’s very obvious and financially meaningful to the business when someone isn’t contributing)
- when they fire someone, they’re very secretive about it. The person stays on the firm’s website for months, and if you call HR, they’ll say that the person still works there (they probably do, in some narrow technical sense). This makes it somewhat easier for the person to get a new job.
Also this a nit but the legal protections aren’t meant to prevent arbitrary termination, which is pretty explicitly legal. They’re meant to prevent discrimination.
by geodel on 7/7/25, 4:12 AM
> For decades, Microsoft operated under an unspoken agreement with its employees—what I call “the pact.” The deal was simple: We’ll pay you 20-50% below market rate, but in exchange, you get stability, reasonable work-life balance, and most importantly, no layoffs.
This seems more of employee's made up rule rather than Microsoft's. I worked in a company in early 2000s' and old timer's told me similar rule "that here pay is less but little work and lifetime job guarantee". It was of course bullshit made up rule. As economy changed not only did they tighten the screws but also had many layoffs since then.
by Havoc on 7/7/25, 12:21 AM
> But something shifted.
The powers that be realized an anxiety riddle fearful workforce can get stuff done too just fine as long as they don’t have a better option and you dangle the occasional carrot.
So as long as all corporations move roughly in lockstep you can drastically change conditions without much consequences
It’s a bit like the first big news website implementing a paywall was outrageous and deemed suicide. But if everyone does it…
by burnt-resistor on 7/7/25, 12:04 AM
This was always a con for suckers. The only ways out are unions and employee-owned co-ops by changing the interests to ensure stability rather than merely being fooled by corporate masters who can always change the deal at any time.
by charlie0 on 7/7/25, 1:57 AM
Rent, don't buy. Maintaining optionality is the thing to do when things are unpredictable.
by squatin64 on 7/7/25, 8:09 AM
why does this not mention ai? these layoffs are essentially only because of ai both indirectly and directly, perhaps not because of current impactful productivity gains but realignment of strategic resources to invest in ai infrastructure (capital vs labor) and then also likely preparation for the continued exponential improvement of models and coding agents which will require humans to get out of the loop
essentially imo all 'pacts' between employers and companies is going to change because basically the entire category of economic work we are doing as a society will become not necessary over the next decade due to this
its just that software development is going to come earlier due to its critical nature to the roadmap of model improvement and increasing lab research speed. also due to the fact that RL works quite well for software development, including the more advanced applications like model research
also as a preemptive rebuttal for anyone saying i have no idea how swe/ai research works i am a swe who also does ai research work
by khelavastr on 7/7/25, 5:10 PM
This is a butthurt Microsoft employee. They've laid off/performance-pushed 20% or so of employees a year. Concentrated in certain departments more than others. Do Google, Apple Netflie and others not have layoffs?
This so