Large companies over-hire to short-term inflate the share price, then lay-off the over-hire to also short-term inflate the share price. In essence, you take the market sentiment and hire/fire in order to reinforce it.<p>e.g. "Outlook is good, we're in a hiring cycle because we want to take advantage of the positive market conditions." "Outlook is bad, we're in a layoff cycle because we want to protect ourselves." Shareholders love both since the company is being "efficient."<p>Only one who loses is the little employees (and, frankly, long term stability; but modern US businesses only have foresight to the end of the current FY and only memory of the last FY).
Perhaps one or more of the following:<p>0. They want to reduce labor costs in the short term.<p>1. They think some projects will not produce value in the near or long term, so they are canceling those projects and laying off the people who work on them.<p>2. They want to reduce salaries in the near and long term. (Fire at high salary, rehire at low if needed.)<p>3. They got a big tax bill due to the changes in R&D amortization.<p>4. They believe they can automate existing jobs and/or replace them with AI.<p>Layoffs usually destroy business value.[1,2] In this case I expect MS might be betting on reduced labor costs (including taxes) in the short term followed by salary reduction and automation in the near and long term.<p>[1] <a href="https://hbr.org/2022/12/what-companies-still-get-wrong-about-layoffs" rel="nofollow">https://hbr.org/2022/12/what-companies-still-get-wrong-about...</a><p>[2] <a href="https://www.inc.com/nick-hobson/according-to-this-stanford-professor-mass-layoffs-destroy-businesses-why-are-they-still-happening.html" rel="nofollow">https://www.inc.com/nick-hobson/according-to-this-stanford-p...</a>
The base interest rate has gone up.<p>Businesses don't pay for costs solely with revenue, they also use cash from loans. Revenue is used to pay off loans, so higher interest rates mean loans become more expensive. To maintain constant loan repayment costs through a projected year, the total amount of those loans has to go down. With lower cash from loans, costs have to be cut and payroll is one of them.<p>I think this partially explains why everyone is doing layoffs regardless of revenue performance: they all have to adapt to the same conditions of higher interest rates.
If you fire when others are hiring. You will be seen as in trouble and sentiment will be negative towards you risking stock price, investment and loss of key persons you did not want to lose.<p>If you fire when everyone else is firing it is just part of the meta cycle and it is business as usual.<p>Overhiring is natural as a combined consequence of broad panning for best hires, preemptive competition squeezing and empire building relying on fresh young unthreathening meat.
Because they’ve identified poor performers or products / teams that no longer fit the strategy or market and need to be shut down.<p>The answers on here are ridiculous.<p>Flip the question on its head - why did Microsoft hire like 30-40k people the last 3 years?<p>Because they were staffing for projects and teams. Some projects got shutdown so the teams / staff is no longer needed.
Probably because everybody else is. If they've over-hired, they can fix matters a bit or if they're very good/careful with HR they can prune some deadwood. Or, it's just part of the plan to break the back of the WFH movement, thus removing worker agency.
Because they believe they'll make even more profits if they lay off those 10k people. Or, at least, that's what the owners (i.e. the current stock market sentiment, the board of directors) believe, and the CEO follows their tune.
It is not doing that great really, it just sounds like it. Sales was up 7% last quarter, profit 9%, but inflation is 10% year-on-year. So Microsoft is effective losing value.
Cos they can. They feel like employees have lost their power and this is a good time for them to shed costs and show who's boss.
It's very shitty but this is capitalism, the stock price will only go up with such moves due to "efficiency".