$MSFT: Nilay Patel on Microsoft: Satya Nadella is telling you there's a platform shift coming

$MSFT has already wasted 18 months on $ATVI. Analyst says 10,000 job cuts are coming.

Says, this whole thing is geared to mobile (thinking Candy Crush) not at-home gamers. Also says the open question is if Nadella splits his vision for mobile gaming with A/I. I would say yes.

What do you think a typical job at Microsoft is worth? Salary plus at least 20% for taxes and benefits. And usually incidentals like travel, electronics, etc and overhead. Easily $100k.

That 10000 jobs comes out $1b in cost savings.

And don’t be surprised by large restructuring charges at earnings time to cover severance.

More details on what Paul is talking about above:

Microsoft is cutting 10,000 jobs, the company said Wednesday, as it deals with economic uncertainty and shifts focus to areas of growth, such as artificial intelligence.

The cuts, which began Wednesday and will go through March, will impact less than 5% of Microsoft’s global workforce, CEO Satya Nadella said in a memo to employees. The tech giant declined to say which roles are being cut. But the layoffs are reportedly impacting its engineering divisions.

“These decisions are difficult, but necessary,” said Nadella. “They are especially difficult because they impact people and people’s lives – our colleagues and friends.”

Just looked on finviz. $MSFT has $14.3 Billion in cash on its books at the moment.

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Just as Paul suggested, here’s what the recent past cuts were from:

The cuts come ahead of Microsoft’s quarterly earnings on Tuesday and almost three months to the day since the tech giant laid off nearly 1,000 employees in October. It’s the largest layoff at Microsoft in roughly eight years, when the company cut more than 20,000 jobs between 2014 and 2015 following its ill-fated acquisition of phone maker Nokia.

A LOT more than $100k. My son and his girlfriend both work for NFLX and together make about $1 million. I’d guess average pay at MSFT to be closer to at least $300k.

$100k is not much these days in a technical position.

He is no fool who gives what he cannot keep to gain what he cannot lose.

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Wow! I should review flicks for them as much as I discover there.

My fave new show is “7 Seconds” and it’s a cross between “Goliath” and “Bosch” from Amazon.

I give it five-stars.

Congrats to your son and his girlfriend.

$MSFT daily, weekly, and monthly charts riding down to test all supports?

WSJ this am says $1.2B write off for severance. That implies about 2% reduction in earnings or about $0.20/share.

I’m sure stars at Microsoft are well paid. But how many stars do they have? They also have cooks, janitors, and a full range of technical people. Their data implies $120k is their average number.

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If you’ve worked in a tech organization, you’ll see there are LOTS of tech people and almost no janitors or secretaries. Or cooks for that matter. About the only non-tech people would be some of the managers… and they get testy when their subordinates get paid more than they do.

In my past situation, non-techs were outnumbered by at least 100:1. No exaggeration.

He is no fool who gives what he cannot keep to gain what he cannot lose.

Except when they get to be a mature company and they pack more management in. The ratio of techs to managers becomes less and less.


Remember what I said in this thread regarding management? That they are loath to be paid less than those who report to them? The discussion in this thread has been about employee costs, not tech vs non-tech. The managers tend to raise the average pay scale as a consequence.

But regarding managment in a tech environment. Most of them are tech. With a few exceptions.

I remember having a non-tech manager once. Completely incompetent for the job (non-tech) and an obstruction to progress. Got a management award though… because there were a couple managers above looking out for her.

He is no fool who gives what he cannot keep to gain what he cannot lose.

Right Rob, absolutely but I have found that many of the lower management would be willing to take less pay so that they didn’t have to work…as hard. Also for the chance to move into higher paying jobs so they could be even more incompetent. It was amazing to see how many managers the higher management teams would try to pack between them and the technicians just to show how important they were.

I once was in a focus group to find how the company could be more efficient. I told them to get rid of all the layers of management between the bottom and the top. You would have thought I had created a crisis.


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Thanks, Rob. I’m sure you know tech better than I do.

In the chemistry lab of my experience, we usually do not have the PhD’s washing glassware. We support them with lab technicians–often premeds or biology students with a few years of college. We also have people working in the stockroom and handling the paperwork. Some get to be team leaders and can have entry level professionals to work with and train.

I’d be surprised if the people taking care of your servers and equipment are PhDs. But if you tell me in the world of tech everything is DIY, that’s ok with me.

Not necessarily. I only know/knew my little corner. Plus what my son tells me… and as I observed touring his workplace. So, two little corners.

And, from there, arguing about other tech… actually office tech. Your lab example would be another world.

He is no fool who gives what he cannot keep to gain what he cannot lose.

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More on $MSFT’s move into ChatGPT. A reader’s letter to the UK’s Financial Times

Microsoft’s $10bn investment in OpenAI is indeed a bet, and in more directions than meet the eye. Much of the company’s near $200bn 2022 revenues are attributable to people licensing its tools to generate their own content, be that content in the form of emails, documents, presentations, or in playing within games that others have generated.

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