Microsoft is streamlining its corporate structure, with a new wave of layoffs scheduled for May 2025. The job cuts, aimed at middle management and non-technical positions, reflect the company’s internal push to “reduce bureaucratic layers and enhance the ‘span of control’ for managers.”
Refocusing on Builders Over Managers
Microsoft is refining its workforce structure to prioritise technical talent over managerial oversight. While the company aims to “reduce bureaucratic layers and enhance the ‘span of control’ for managers,” sources clarify that the changes are not part of a broad cost-cutting initiative.
Instead, the focus is on recalibrating the internal “PM ratio”—the number of Product Managers to Engineers—to ensure more technical contributors are embedded in product development. “The goal is to improve efficiency and increase the ratio of engineers to non-engineers within project teams,” one source noted.
The approach draws parallels to Amazon’s “Builder Ratio,” which favours engineering-led teams over administrative-heavy structures.
Following Broader Trends in the Tech Sector
The company’s pivot is part of a larger realignment sweeping the tech sector. Google, for instance, cut a tenth of its vice presidents and managers earlier this year, aiming to become more efficient and “reduce managerial bloat.”
Amazon has also restructured, placing increased weight on engineering talent to drive innovation, mirroring Microsoft’s current direction.
Anticipated Internal Impact and Role Vulnerability
The effects of Microsoft’s restructuring are expected to vary across the organisation, with teams carrying heavier management layers or higher concentrations of non-technical roles facing greater risk. While performance is not the primary driver, the report notes that employees “with consecutive low performance ratings may also face scrutiny.”
“Microsoft’s planned layoffs reflect a strategic effort to optimise its workforce and enhance operational efficiency,” according to the source.
Addressing Employee Morale and Organisational Culture
While the restructuring aims to improve efficiency, the transition may create uncertainty among employees. The elimination of roles and team reshuffling could strain internal culture, prompting Microsoft leadership to address morale and preserve continuity.
Conclusion
The upcoming changes at Microsoft reflect an organisational push toward speed and technical focus, as the company trims complexity from its internal hierarchy.
Specifics on the scale of layoffs and team-level impact are expected to surface in May. The move is consistent with industry-wide adjustments that prioritise engineering strength over traditional management depth.