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Ask Slashdot: How Many Employees Does Microsoft Really Need? 272

An anonymous reader writes: Yesterday, word came down that Microsoft was starting to lay off some 18,000 workers. As of June 5th, Microsoft reported a total employee headcount of 127,005, so they're cutting about 15% of their jobs. That's actually a pretty huge percentage, even taking into account the redundancies created by the Nokia acquisition. Obviously, there's an upper limit to how much of your workforce you can let go at one time, so I'm willing to bet Microsoft's management thinks thousands more people aren't worth keeping around. How many employees does Microsoft realistically need? The company is famous for its huge teams that don't work together well, and excessive middle management. But they also have a huge number of software projects, and some of the projects, like Windows and Office, need big teams to develop. How would we go about estimating the total workforce Microsoft needs? (Other headcounts for reference: Apple: 80,000, Amazon: 124,600, IBM: 431,212, Red Hat: 5,000+, Facebook: 6,800, Google: 52,000, Intel: 104,900.)
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Ask Slashdot: How Many Employees Does Microsoft Really Need?

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  • by andyring ( 100627 ) on Friday July 18, 2014 @11:22AM (#47483021) Homepage

    I work concurrently in a large company (45,000 employees) and a small company (50-ish, but for years we were in the 5-8 range). I am solidly convinced that the larger a company gets, the higher the number of excess employees.

    How do I work concurrently in both companies? My primary employer is the small company, but the large company has subcontracted me via my primary employer to work in their HQ 3 days a week because a specific department (which my primary employer specializes in) is swamped, or so they say. So, 3 days a week I work at the big place with very little to do and end up doing a small amount of work and lots of web browsing or reading or working remotely as I'm able on tasks for the small company. And then 2 days a week I'm at the small company, swamped and playing catch-up.

    Granted, this is but one example, but the contrast I see on a daily basis is stunning. Even in my smaller employer I see us getting more inefficiencies and "dead weight" employees. Back when our employee count was in the single digits, it was a whole different ballgame. We were small. We didn't have the resources to carry extra employees. When someone would quit, it was a huge deal because we'd be losing literally like a sixth of our entire workforce. And it was a fun environment! It truly felt like a tightly connected team.

    Don't get me wrong, I'm not complaining. I've been employed at the small company for 16 years and have no desire to leave. But to get back to the original question, the bigger a company gets, the more dead weight they'll carry until the times get really tough. Then, you'll see where they can cut the fat.

    Here's an example. A few decades ago, the Rock Island railroad was a well-known railroad across the Midwest. They went bankrupt in about 1980 if memory serves. Leading up to their insolvency, they ended up leading the industry in getting down to a 2-person train crew because they simply had no money to pay additional crew members. From what I've heard, managers literally told train crews "Tough luck, you get an engineer and a conductor because we can't afford to pay for a brakeman." And now the industry standard is a 2-person train crew.

    Aside from Microsoft, a FAR better question would be (not to turn this political, but it's a fair question): "How many employees does $government really need?"

    Where am I going with this? I'm not sure. Maybe I'm rambling because I'm bored. :)

  • by xxxJonBoyxxx ( 565205 ) on Friday July 18, 2014 @11:34AM (#47483139)

    Just a rule of thumb I've seen in the lower end of the tech market to stay profitable. At $100B revenue (per year), that's 200K employees. At 110K employees, they're around 900K per employee, which is great.

  • Re:Corporate culture (Score:5, Interesting)

    by Anonymous Coward on Friday July 18, 2014 @11:48AM (#47483253)

    This post and a comment in another [] help explain the problems common in management systems.

    Initially, you have enough managers to stay busy keeping track of the work and relaying status to the guys at the top. As base employee numbers shift, some managers become overworked and others have free time. The managers with free time try to convince the C*Os that the overworked managers are just inefficient, while the overworked managers attempt to convince the C*Os that they are overworked and need underling managers (and that the underworked managers are slackers, not really doing their job). Once a few underling managers get added, there becomes a war of status over who has the most underling managers, regardless of the actual utility of any of them. The upper managers bicker for the favor of the C*Os, the middle managers compete over improving their rank, and the lowest rung of managers is stuck either trying to do a good job and crippled by the weight of decisions from above or ignoring their job and trying to squeeze up a few tiers.

    Sometimes a CEO, board of directors, or other high rank will notice that 2/3 of their budget is going to managers, 50% of their staff is management, and productive employees are leaving citing "management troubles" as their reason for going. Then starts a vicious burn cycle that tries to preserve the most competent managers and cut out all the dead weight (success rates vary), like the one that has been going on at Microsoft since Windows 8 went retail while not just ignoring but actively rejecting customer inputs about the release candidate versions.

  • No Worries (Score:2, Interesting)

    by Anonymous Coward on Friday July 18, 2014 @11:58AM (#47483339)

    A mass layoff would normally be a tragic thing for the employees. However, these are people with programming experience from a top tier computer company. With all the recent reports of the huge need for more coders, they should have no trouble getting new jobs. RIGHT?

  • by tobe ( 62758 ) on Friday July 18, 2014 @11:59AM (#47483347)

    > Between that an automation it just looks like we're running out of work to do..

    You are dead right there.

    Drive for a living? Not for much longer.
    Fly for a living? Not for much longer.
    A broker or agent of some kind? Won't be needing you so much.

    Globally huge numbers of traditional blue collar jobs are being made obsolete and they're not being replaced in sufficient numbers with new opportunities. We're going to have to adjust to the reality that within, say, 100 years... unless climate change or war or whatever hasn't significantly affected global demographics.. most of the developed world's population is not going to be economically active within the existing model of trading labour for goods. We're going to have to find cheap ways of keeping them fed and pacified whilst still being able to look at ourselves in the mirror.

  • by jbmartin6 ( 1232050 ) on Friday July 18, 2014 @12:47PM (#47483805)
    It makes it a lot safer. "We laid off 18k and you were one of them" is more defensible from lawsuits than having to individually justify 18k layoffs.
  • by King_TJ ( 85913 ) on Friday July 18, 2014 @12:50PM (#47483845) Journal

    As has been pointed out already, the "How many employees does MS need?" question is ridiculous, as there's no way ANY of us here is qualified to give even an approximate answer that's not just a complete guess.

    That said, it *is* possible to talk specifics and point out areas where improvement is needed.

    The last I heard, Microsoft had an internal structure where those developing new applications weren't the ones responsible for debugging them. They just spit out the code, and another team would have to fix/clean it up. To me, that makes absolutely NO sense, as the people best qualified to get a program running right are the ones who wrote it in the first place! I've heard that's one of the things that's going to change to improve efficiency, and if true -- I sure hope so, even if it means laying some people off.

    I also understand that finally, the Mac and the Windows Office developers have been instructed to work as a team -- vs. treating the Mac Office developers as an isolated group in the company. (That *may* have been originally done based on a silly interpretation of the financials, vs. any true benefit to the development of the code? I remember the Mac division of Microsoft once bragging that it earned the highest profit margin of any division in the company, per employee hired -- simply because it was such a small team.)

    I will say I find it telling that even Intel corporation has over 20,000 fewer employees than Microsoft does, right now. I can't really imagine that chip development and sales by the world leader in that area would require less manpower than Microsoft needs to sell and support some of the code people can run on those chips?

  • My experience (Score:5, Interesting)

    by Cute Fuzzy Bunny ( 2234232 ) on Friday July 18, 2014 @01:07PM (#47483993)

    I worked for some time for one of the largest companies in the world during its biggest growth period. We had about 40,000 employees when I joined and about 15 years later we had about 120k. Honestly, we didn't really do anything significantly different production wise at the end that we weren't doing that the beginning, perhaps 10k of those extra 80k employees contributed to an actual increase in delivered products and services.

    At the beginning a department was generally a manager who reported to a VP or GM, they had 5-6 managers under them and each manager had 6-12 employees. Those first line managers were responsible for making decisions and accountable for the results. About half the company was in manufacturing or customer support of some kind.

    What we had at the end were lots and lots of meetings with lots and lots of people who all wanted a vote. Ownership and accountability were all over the place. Perhaps 3-5 people were all doing the job that one FLM was doing at the beginning. We had a ton of process and paperwork. Lots and lots of middle management. There were now as many as 7-8 layers between a first line manager and a GM or VP. That's another thing. I think we had about 9 or 10 VP's at the start and we had about 50 of them towards the end. We spent millions, even billions on things we really had no core competency on and then abandoned them when the people running them realized the quagmire they were in was about to go over their heads. We got further and further away from profitable products and services.

    Then we took a seriously wrong turn innovation-wise (like we didn't do any for a while, just insisted on doing the same stuff we'd always done, the way we'd always done it) and we almost had our lunch eaten by a far less capable competitor. We lost or laid off about 30,000 employees in just a few years. Unfortunately many of them were the talented people who just didn't need to deal with uncertainty or bureaucracy anymore. Miraculously, a small group of employees coughed up a major innovation and we got back into the game and came back gangbusters. The company has such a commanding lead in the market they're in and are so efficient at manufacturing that really nobody else can profit in the segment so they'll maintain inertia for at least another 3-5 years, maybe more.

    The company is still doing well, but frankly even at current employee levels you could take another 20-30k of the middle management and redundant "stakeholders" out to the parking lot, tar and feather them and not allow them back into the building ever again and absolutely nothing bad would happen. As long as you held onto the manufacturing, IT, customer service, engineering and about 50 marketing/PR people, things would go at least as well.

    We worked with Microsoft a lot and I met regularly with their execs and senior management. They have pretty much the same disease. A long in the tooth cash cow that turns out money like a broken ATM and management that's sure all of that is due to their guidance and genius. Extreme narcissism and an ivory tower that goes to the moon. Most of the key decision makers and innovators are probably mired down in 7.5 hours of meetings a day and spend the other hour and a half doing e-mail and writing progress reports. Once they wander too far away from the cash cow, they burn through money and get nowhere. They absolutely fit the saying "when you're a hammer, everything looks like a nail". Its all about "how do we stuff Windows into it, and lets just try to do the same things that others already squeezed the profit out of, whether there is a real strategy there or if it even fits into anything we have any competence in".

    So I'd say that with their current reasonable and profitable product set, they probably need around 65k-70k employees. I don't think at this point that they really have any valid position in the hardware business. The mobile market blew past them 3+ years ago. They might make 4th or 5th in the ecosystem business if they tried hard. They could easily be pushed right out of business in under 5 years.

  • by lgw ( 121541 ) on Friday July 18, 2014 @01:20PM (#47484091) Journal

    It makes it a lot safer. "We laid off 18k and you were one of them" is more defensible from lawsuits than having to individually justify 18k layoffs.

    That's exactly backwards. In the US at least, you can lay off anyone without cause at any time in most states. However, a layoff of this size triggers the WARN act (originally written to soften the blow of closing The Factory in a factory town), requiring jumping through 17 flaming legal hoops to keep it all legal.

    OTOH, I have no clue about Finland. Maybe you're right there.

  • by rsilvergun ( 571051 ) on Friday July 18, 2014 @01:21PM (#47484093)
    not a weakness. Microsoft does this is a) to maintain backwards compatibility (which locks businesses in since they'd have to re-purchase or re-write tons of software) and b) to fix bugs and work around limitations in other vendor's software ( again, lock in ).

    In office there's something called the 80/20 rule. 80% of your customers only use 20% of your features, but it's a _different_ 20% for just about every customer. There's always 1 feature a customer can't live without. That's what keeps 'em locked in :).

    The danger from dropping rarely used features and picking just one way to do things is that you'll force your users to spend lots of money switching over to the 1 way you picked, and they'll start asking if they should look for alternatives.
  • by Garfong ( 1815272 ) on Friday July 18, 2014 @02:39PM (#47484757)

    Sounds like your ex's workpace needs to unionize.

  • by Anonymous Coward on Friday July 18, 2014 @03:10PM (#47484913)

    This is absolutely correct.

    As a manager, I look forward to layoffs because it is so much easier to get rid of mediocre performers with much less risk of lawsuits and months of Performance Improvement Plans". Although, my teams never have had to contribute anyone (I'm always asked "is there anyone you would like to contribute to the layoff?" and if the answer is "no", that's the end of it). YMMV though because I'm pretty good at getting rid of my own hiring mistakes quickly (and I rarely make them but the downside is I take longer, on the average, to fill open positions than my peers) because they usually decide to leave in a few months under their own power (albeit with a bit of "coaching"). Unfortunately, when taking over a group that's been in existence for some time and prior manager(s) were wimps, it's not as easy because the mediocre performer has too often bonded with the team.

    Interestingly, layoffs often make it easier on the employee - it's much better to say you were let go because you were 'redundant' than because you were fired. It also often has less negative impact on team morale (although, not company morale probably) because the PIP stuff, over the months, usually leaks out to the team and often they feel sorry for the targeted employee and, when they employee is finally let go, they often let their emotions get ahead of their objective opinions.

    Most team members know who the mediocre employees are and would often prefer that they had never been hired, but are wimpy when it comes to getting rid of them via targeted actions.

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