It's silly to mention the cash on the balance sheet without also mentioning the debt of $77B. In reality, the net cash position is on the order of magnitude of $30B which puts a much tighter perspective on the impact of this cut. 40% of all public companies created since market inception in 1871 have gone bankrupt including many of the bluest of the blue chips. Complacent thinking like this is often the reason. Additionally, if you've ever worked at a large company, you can see first hand at how much bloat there is.

I would think the figure of public companies gone bankrupt to be much much higher over that long of a time frame.

> would think the figure of public companies gone bankrupt to be much much higher over that long of a time frame

Bankruptcy is a symptom of leverage. Companies more and more fail by being acquired into oblivion. (It's also common for a dying industry to consolidate until its last gasp.)

There are other exits besides bankruptcy, I think a lot of companies kind of whimper into near bankruptcy and then sell to others or just cease operation without bankruptcy, would need to get actual data, but that is my speculation.

Acquisitions mask a lot of it.

Its why almost no YC companies have “gone bankrupt,” someone one will usually pay a nominal amount “for a team” and founders are happy for the soft landing.

That's fantastic debt though, at presumably low interest rates. A dollar in my pocket today is worth way more than a dollar in debt at 3.0% interest or less. You can't subtract debt from cash on hand and get a usable value, they're different types.

Could you clarify what you mean about the dollar in your pocket worth more than debt at 3% interest?

In corporate finance net cash or net debt is indeed standard practice (cash on balance sheet less debt on balance sheet). It sort of helps understand how much cash is ‘available’ to give back to investors, or pay down debt, spend on R&D, etc.

Now since most of MSFT’s long term debt matures in 2027 or after, you could argue that there is not much cash need for debt repayments in the near term. On the other hand, cash flow from operations was down year over year in their last reported quarter so belt tightening is probably needed to reverse that trend.

> In corporate finance net cash or net debt is indeed standard practice (cash on balance sheet less debt on balance sheet). It sort of helps understand how much cash is ‘available’ to give back to investors, or pay down debt, spend on R&D, etc.

I'm not a financier, but isn't "available cash" the amount left over after subtracting the amount needed to service (rather than clear) the debt?

Fair question. My answer would be... kinda.

The cash available on an ongoing basis to be re-invested or returned to investors is what you might call levered free cash flow [0], which I think is what you are referring to.

My comment about "available" cash is more like available for big one-time investments like a big acquisition, a special dividend, or something like that.

[0]: https://www.investopedia.com/ask/answers/111714/whats-differ...

It's "MBA circle jerk" to understand that taking out debt at a lower rate than the ROI you use the debt for is advantageous?

I don't really agree with the person you replied to because 'enough to bankrupt a small country' is not a helpful comparison.

But while the debt obligations are certain, the ROI is less so.

Not really, it's financing 101. If the cost of borrowing money is low then it's worth taking on debt to finance your growth. Once the rates rise you can service that debt (likely at ~1.5%) and reap the rewards on extend yourself with those low interest rates.

You don't even need to be an MBA so see that value, even your dentist probably does it. If they can borrow 150k and increase the size of their clinic, they can then get more money from providing their services to more people.

If you comment was more aimed at the amount, $77B, then keep in mind that it's far from a bad ratio considering the assets of MSFT at 107B that's 0.7 which is high but not abnormally high considering that we are coming out of historically low rates.

Finally, there is such a thing as carrying too little debt, which is unsurprisingly a bad thing because it hinders your growth. Think about what MSFT did with that money. They hired people and developed new products to fight AWS and GCP if they hadn't done that, their rate of innovation would be lower and they would have fallen behind, slowing their future growth. Without cheap debt they likely wouldn't have given a ton of compute to OpenAI for ChatGPT which is now making MSFT look much better compared to Google and Amazon.

A fantastic thing in fact!

That's exactly what a balance sheet does. Offset assets and liabilities.

A lot of the bloat is at the top. How many executives, VPs, directors, high level managers, etc. are part of this?

Generally layoffs include management cuts as well.

There are far more employees than executives, though. Think about how many employees are in the org chart under a single VP.

Numerically you can’t get appreciable cost reductions by reducing management alone.

Bloat can be all over the place, it’s not exclusive to the top of org charts

Bloat at the top, whether people, process, or organizational bloat, has an amplification effect that isn’t found at the bottom.

It's a trap companies can easily find themselves in. If you're looking to cut costs, the first thing the C-Suite will look at is all the workers that aren't adding immediate business value, so you cut them first; simple and easy. Then as tech debt and issues pile up, you, as management, figure that your first approach to figuring out what's going wrong is to hire managers and consultants to understand why your workers aren't as productive as before. Unfortunately all of these middle managers just create more burden on workers as they are micromanaged and sent to meetings more by managers looking to justify their existence. Of course these managers will say whatever the C-Suite wants to hear to keep their jobs, so more blame is pushed onto the lowest level, more managers are hired to try to make them more productive, and a vicious cycle continues.

prbobaly not a whole from the layoffs i've seen at 2 of my employers.

classic IC answer

source: I'm an IC

Is there a position there?

Those are the people making the layoff decisions...

That debt is likely just leveraging OPM though.

The linked article gives no more information than "Sky news reported this, citing sources."

Microsoft employs a wide variety of people, not just developers, and a lot of those jobs aren't making nearly as much as $250k/yr, nor are they so easily rehired into a job somewhere else.

I added an edit to round down. Again, I used $250k as a loaded cost - benefits, stock options, IRA matching, etc. Someone on $125k year might still 'cost' an extra $40k, and ... the $250k was possibly on the high side - round down to... $200k, and the argument is now... $2b/year instead of $3b. And yeah, many of these folks may have a harder time finding an equivalent paying engagement (perhaps you'll have to move? hard on people with families, etc).

And not just in the US.

Why would they spend any amount much less $3b or $10b to keep people they don’t need/want?

Normally, hiring 11,000 people you "didn't need" would be a warning sign that management was incompetent and require much more than just laying off the unneeded workers. It would suggest that large reforms are needed in planning and hiring. But these days it's just dismissed as an "oops!".

They wanted 11,000 extra heads when the market was rewarding growth.

Now that the market is rewarding bottom lines - they don't want 11,000 extra heads anymore.

It's easy to "blame the Fed" for the market rewarding the bottom line. But we forget that the reason the market was so crazily rewarding growth 2 years ago was also... because of the Fed.

MSFT stock is barely moved on the announcement. Doesn't necessarily seem like the market is rewarding them.

If the stock isn’t moving, perhaps the news is already priced in.

So either insider trading or a lot of people guessing they’d do a big layoff at some point?

Microsoft stock has been incredibly volatile though in the past year.

> MSFT stock is barely moved on the announcement. Doesn't necessarily seem like the market is rewarding them.

It's always hard to distinguish signal vs noise in stocks, but it has gone up 0.5% in 24 hours, which is a $8bn raise on the market cap.

Cutting $3bn in wages is never going to radically change the market cap of a $1.7T company (you hope!).

Hard to say if the market was expecting layoffs.

They clearly did need/want them at some point. And then things change.

“When the facts change, I change my mind. What do you do?”

no hiring process fires 100%. a healthy company deals with that reality incrementally. since many companies have adopted a policy of just generally not firing anyone for performance reasons, they just accrete these people, and when the opportunity arises (i.e. merger), they vent them en masse. I guess its easier to deal with the emotional/morale issues? probably legal too.

> many companies have adopted a policy of just generally not firing anyone for performance reasons

Not sure if that's true. For example, out of FANNG afaik only G would be least likely to fire ppl, they gave very generous chance to employees to improve and would only do 'piping' as the last option. But all the others have various forms of stack ranking and aggressive piping mechanism.

I would assume many other companies do the same

> Normally, hiring 11,000 people you "didn't need" would be a warning sign that management was incompetent

Not really, Big Tech was in an 'arms' race the last decade where they felt if they did not hire people the competition would and they would be worse off in the long run. They all did this. Hence why everyone is trimming the fat as soon as the bubble showed an inkling of popping.

Everyone over hired, over paid, and didn't innovate with it enough to make up for the spending.

There are tons of people at these companies that can be let go.

Or, it means that they didn't forsee the economy going down to the extent it has. Corporate finances work like any large investment company. How much cash do you have on hand, how much is it earning per year, what is your revenue.

If you suddenly are getting 10% less from investments and possibly less from revenue due to a severe economic downturn, then you need to save 10% in costs somewhere, and for tech companies people are always the biggest cost.

There is no conspiracy here. You may wish that these large companies would have seen a recession coming, but that's not a very realistic wish.

There's no recession, though. There may be one this year, but it didn't exist before all of these layoffs. It may not be a conspiracy, but it seems questionable to believe these companies are not willing a recession into existence through, charitably, pessimism.

I think it is less pessimism and more realism. The fed clearly indicated that it will raise rates until the market cools

As far as the Fed is concerned inflation, unemployment & GDP growth are all definitely higher priorities than the stock market.

I agree. I didn't mean to imply I was taking about stocks.

If the fed is shrinking economic investment until employment and inflation goes down, companies are preparing for slow growth.

The US economy shrank in the first 2 quarters of 2022, and is already forecast to shrink in the first 3 quarters of 2023. Whether it’s in recession or not is a technical issue for economists, but the reality for many companies is that they face a lot of challenges at the moment.

In tech particularly there was a boom as businesses moved online during the pandemic that’s shrivelled away with increasing interest rates and inflation.

There's definitely a recession, however it's hiding behind inflation and rising interest rates. The two trillion in reverse repos are why the recession is having a softer introduction than you may be used to seeing. Companies are both responding too and getting ahead of the equities crunch. The economy crashed and the recession started in full form in March of 2021. But reverse repos have allowed the fed to inject two trillion into equity markets behind the scenes and without the directed action that requires fund managers to rebalance.

For one, in many many companies layoffs start in HR/hiring themselves. If MS needed to hire a ton of people in 2020-2022 it’s not at all a sign of incompetence if they hired a lot of recruiters/other HR folks in that time to handle it, and then spin it down when they aren’t as busy hiring.

The same goes for marketing. If you are going to reduce your marketing spend you don’t need as many FTEs to work on it.

For engineering, MS is a lot more old school than some other tech companies. Internal transfers basically require re-interviewing, and a lot of people don’t have many transferable skills. MS could be better off (and employees even better off) if they directly laid off e.g. engineers working on Windows LTS rather than trying to find them roles in Bing.

Not saying layoffs are ever good, and the details of this one remain to be seen, but I don’t think a 5% layoff signals incompetence

A company that can't figure out what do with employees is just as much a warning sign.

It's a bad signal that Microsoft can't think of any development worth doing.

As customer of their tooling I can think of lots of stuff, but yeah management apparently not.

> Normally, hiring 11,000 people you "didn't need" would be a warning sign that management was incompetent

Sure, but 2020 and 2021 were extremely abnormal.

There's nothing indicating that they hired 11,000 people they didn't need. Many of the people being cut have probably been there for a while but may no longer be needed. The article mentions HR staff being laid off which makes sense since the hiring boom in tech has vanished. I don't think you can draw any conclusions about bad management or mistakes from this, the economy and the tech sector are in a slump with practically every large employer trimming fat. This is just business as usual.

"Management should plan ahead."

*Microsoft lays off 11k in lead up to recession

"No, not like that."

I don't think there's any grand scheme to screw anyone over here. Growth was important and now the balance sheet is more important.

We could always start talking about tech unions and guaranteed severance packages and other employee protections but it seems silly to just brood about 'the management.'

You're thinking at a corporate efficiency level, which is why shareholders want layoffs.

To an individual manager, their pay is generally proportional to the number of reports, so the incentives are for them to hire.

The point is that yesterday, they did want/need these people. To make a broader point, when money was cheap all the tech companies expanded to use cheap money to make bets that would grow their revenue. Some of these were speculative, some of these were ill thought out. In the same way that some companies started stupid projects during the cheap money era (meta, I'm looking at you), there will be companies that cut good projects now that the markets are demanding efficiency. The ideal company doesn't start doing stupid stuff during the cheap money era, and continue to invest when rates go up, safe in the knowledge they're confident that their bets will pay off. The problem is CEOs are following the market, rather than making real decisions for themselves, which kind of makes you wonder... weren't they meant to be getting paid 399x the wage of the average employee because they're the best and the brightest, not just following the crowd. But they aren't the best and brightest and they are just following the crowd - which is why they're going to fire a load of people, because we pay them because the buck stops with them. And by them, I mean them firing us.

The buck stops with them because they keep on raking in the dollars, unlike the people they fire.

> Why would they spend any amount much less $3b or $10b to keep people they don’t need/want?

I understand that HN is a US-centric forum, where neoliberalism dictates the baseline and the interpretation of all things in life is reduced to a simplistic transaction in a theoretical free market.

However, society is comprised of people with family and a personal life and hopes and dreams and aspirations. Hiring someone has a profound impact on their life, and firing them moreso. There's the income aspect, but also the impact it has on where a person can live and consequently all roots their family have in a community. Hiring a person entails a tremendous social responsibility, and moreso firing them. Microsoft has a hefty amount of immigrants from all corners of the world, and some who have visas that limit the odds they can stay even in the country, let alone their community.

It's deplorable how a company can toy with someone's life like that just because some exec feels like it.

Is it neoliberalism specifically, or even just generally living in a capitalist society? (Which hey, I'm happy enough to live in a capitalist society, it has been good to me, but I definitely notice myself evaluating nearly everything through a financial or transactional lens).

I think it's very easy to live in a capitalist society and still treat people as human beings rather than financial instruments, but if you live like that you probably will not become CEO of Microsoft.

Its a tragedy of public education that people do not realise that there are different kinds of capitalism. After all, slave trade was capitalism too.

We just went through a massive transition from Kenzian to Neoliberal system, and nobody realised. The underperformance of Neoliberal system compared to its predessesor should be the biggest discussion point in all news.

Noone has even heard of shumpeterian theory.

Is the implication that some but not all kinds of capitalist societies would encourage or cause people to view many "normal" things (not just inherently or clearly transactional things) as transactional?

What would be the kinds of capitalism that would or would not cause a transactional mindset to seep into all parts of life?

Dont know why this got downvoted. HN to toilet.

This is an uncharitable take. The ability to fire at-will is the reason companies in the US are able to hire and pay as high as they do. As a dual-national Brazilian-American who has also spent years living in Europe, the social contracts are very different, and different people might value different things, but I'll take the downside layoff risk in exchange for upside in pay and mobility.

> This is an uncharitable take. The ability to fire at-will is the reason companies in the US are able to hire and pay as high as they do.

I feel there is no rational basis for this belief, and it's mostly guided by wishful thinking to fool yourself into believing that all this penance leads to some kind of salvation.

It doesn't.

There are highly paid professionals in other countries who benefit from higher worke protection laws and even public services like working national health services and free education. Virtually all European countries ensure greater workers protection and half have a higher human development index than the US, and FANG salaries in Europe often lead to far greater disposable income. Heck, I personally know a FANG who was forced to pay overtime for oncalls in europe while US workers only get the pager app and the shaft.

Also, being subjected to abuse is not a requirement for mobility. Mobility only requires that you can quit your job and apply for other positions. There is no piece in the equation that requires abusive revolving door hiring practices.

People should shed their victim mentality and stop fooling themselves on how the path to riches is through suffering. It isn't. Basic human decency doesn't need to be thrown out of the window. That's only a requirement to screw over workers out of their rights and livelihood.

>Heck, I personally know a FANG who was forced to pay overtime for oncalls in europe while US workers only get the pager app and the shaft.

It does not follow that it leads to greater disposable income. Retail workers in the US also get paid overtime yet their disposable income is nowhere close to that of exempt (no overtime) programmers. Basically, with the tax rates in most of Europe, one's disposable income would be less even if the nominal income had been as same as in the US but it is not even close so you are, at best, misinformed when you think you get greater disposable income.

> It does not follow that it leads to greater disposable income.

It wasn't supposed to. It was suppose to point out a concrete example of how stronger worker protection leads to being paid fairly for the work you do, while US workers are not.

Meanwhile, feel free to check how any FANG salary for software engineers in places like Seattle compares with the cost of living, and how the salaries for equivalent positions in European cities like Amsterdam, which also has a notoriously high real estate, lead to higher disposable income.

As someone who's always heard that US pays much better but never verified it, this was interesting to look into.

According to levels.fyi, 90th percentile in the Greater Seattle area [0] is $344-363k USD while 90th percentile in the Greater Amsterdam area is $162-170k USD [1]. Taking the mid point of both ranges, you make 2.13 times more in Seattle before tax. After tax, you get $244,933 in Seattle [2] and $118,078.95 in Amsterdam (with requisite conversions from/to USD when using the linked tool) [3], bringing the difference to 2.07x more take-home in the US.

The next step is to compare cost of living. I don't know which source is most reliable, and not all sources include international cities, but a Reddit comment suggested Numbeo so that's what I went with [4]. It reports that local purchasing power in Amsterdam is 18.1% lower than Seattle, while categorized prices in Amsterdam are anywhere from 18.8% (restaurants) to 39.3% (groceries) lower in Amsterdam. So it seems you would need to have to be paid quite a bit more than 50% of your US total compensation to achieve the same standards of living.

I'll spare the details because I didn't look too deeply, but I also did look into the cost of major purchases that people value - houses (3 beds) and cars (specifically the Polestar 2, which is an EV more on the luxury side). These things are definitely not half as expensive in Amsterdam as in Seattle.

So, I can only conclude that US workers do end up with higher purchasing powers despite less worker protection. While European workers do get a lot of benefits, many I probably don't even know about as I don't live there, Big N-tier companies (besides Amazon) usually have generous benefits like employer-paid health insurance that lessen the gap in benefits somewhat.

[0] - https://www.levels.fyi/t/software-engineer/locations/greater...

[1] - https://www.levels.fyi/t/software-engineer/locations/greater...

[2] - https://smartasset.com/taxes/washington-tax-calculator#L3MFa...

[3] - https://thetax.nl/?year=2022&startFrom=Year&salary=900&allow...

[4] - https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

I'm not sure why this represents a victim mentality or some kind of penance. I don't see it that way at all. It's simply risk/reward and understanding how the economic incentives work independent of moral judgements.

As a founder it's crystal clear: you quit your job, you start building a company with no salary, you get some traction, get some investment, and if you work hard and have a good dose of luck along the way you can be very successful (far more than any salaried employee), or you might fail and earn nothing.

Now you add employees, they are expensive and you don't really know what the business climate will look like over time. You know you need some to fulfill your growth potential, but where is the point of diminishing returns? There's no way to know. The Silicon Valley VC model is: if you get a whiff of product-market fit and think you have a potential category-defining product, pour as much money in as you can to maximize scaling—even if it is wasteful or risks flaming out, you do it anyway because otherwise someone else may do it and win.

Now, if you are in a country like France, worker protections mean that if you over-hire, you risk killing the entire company because you overshot your mark and you can't do layoffs. This absolutely plays into hiring plans, and if you don't acknowledge this then it is you who are engaged in wishful thinking.

Note that I don't have anything against worker protections, I liked living in Europe and there are a lot of things that are preferable to the States, but economic upside for programmers like me is not one of them. FAANG definitely broke through the old glass ceilings for tech folks, but A) that competition was introduced by American capitalism and B) even for FAANG it's still significantly higher total comp stateside.

Perhaps the best of both worlds is American mobility coupled with European public services, as the other post mentioned- "working national health services and free education." Not having to stress over lack of health insurance or ability to pay off student debut (and medical debt!) would go a long way towards making American layoffs less existential.

> it's mostly guided by wishful thinking to fool yourself into believing that all this penance leads to some kind of salvation.

Something similar leads to russian people to support Putin. They know that they are wrong, but the thought that they are wrong and all the suffering was for nothing is too terrifying for their subconcience to even ankowledge.

> I understand that HN is a US-centric forum, where neoliberalism dictates the baseline and the interpretation of all things in life is reduced to a simplistic transaction in a theoretical free market.

The only reason Neofeudalism didn't quite arrive is that its difficult to get rid of unprofitable serfs. A lord was actually sort of responsible for his territory.

Here you can dump unwantes on the state and voila, no responsebility!

Unless they're laying off 11,000 developers and managers the loaded average is probably even less.

> MSFT currently have $100b cash on hand.

Fwiw, unless cash on hand already accounts for it (I don't think it does), then $70B of that is tied up in the Activision acquisition. Thus we really only have $30B cash on hand, which in a higher than previous interest rate environment is probably not great (though afaict Apple has $48B). Likewise, our cash on hand has been drastically dwindling the last few years, making the $30B total seem a bit more precarious.

I have suspicions that the Activision acquisition is a huge part of the hiring freeze at Microsoft and the source of a lot of budget concerns and constraints. It's pretty frustrating watching all the freezes seemingly because of this one acquisition (as an employee without any inside knowledge about this).

I had seen someplace else that there's... $107b as of last quarter, but it was down 17% from year before same quarter, so yeah, it's draining some. But are they really putting $70b down in cash for Activision?

> But are they really putting $70b down in cash for Activision?

Yes it's all cash.

https://news.microsoft.com/2022/01/18/microsoft-to-acquire-a...

I really, really doubt that acquisition is 100% cash.

It is all cash.

> As announced on January 18, 2022, Microsoft plans to acquire Activision Blizzard for $95.00 per share in an all-cash transaction.

https://www.businesswire.com/news/home/20230111005882/en/Act...

In this context, "all-cash transaction" means that the Activision shareholders get cash for their shares and not some combination of cash and MSFT shares.

Where and how MS got that cash is not being addressed.

Interesting. Still, large parts of that cash could be financed. I doubt Microsoft would just spend 70% of their war chest on a single transaction like this.

They haven't said so yet -- perhaps they'll clarify on the call tomorrow -- but they'll probably take down new debt to make this happen; it's a good time to go to the markets, and a lot of their cash is parked overseas. Fitch recently announced they're withdrawing their ratings for MSFT debt, so that's probably an indication they expect a significant amount of the purchase price to come from new issuances.

> they'll probably take down new debt to make this happen; it's a good time to go to the markets

How so with interest rates that keep going up?

You are also forgetting these people arent sitting on their asses! On average they are at least making the company that much in revenue no? Being unable to deploy them to good use is truly a leadership incompetence!

In aggregate, employees make a company money. That much is trivially true. At the individual level, one can be a net gain, net loss, or breakeven. I often wonder how skewed this distribution is at some companies. Ideally you trim the ones that are a net loss and thus on average aren't making the company money. Whether or not it's obvious who those people are isn't known to me. Anyway, I don't think it's a good assumption that the people being laid off are making the company money on average.

It makes me wonder if they ever allocated money on a as-needed basis. Are they hiring across the board the way they are laying off across the board? Because then their hiring practice makes about as much sense as their firing practice.

They must be looking at the recruitment cycle as a cyclical process.

It boggles my mind that people will work hard for an employer. You care about you less than a used napkin.

There's no shame in working hard at your job or getting a sense of satisfaction from writing programs to move 0s and 1s around, but I sometimes forget that my employer at the end of the day really does not personally care about me.

Always good to keep this in mind.

We don’t do it expecting love in return - we get a paycheck every two weeks

I get my paycheque for showing up. For dedicated work rather than mediocrity, I need extra.

so what seems to be the problem?

You can get people to "show up" for far less than MSFT salaries.

It doesn't cost you anything to do your best work

that's absolutely un-true in nearly every field, even CS ones.

I don't even get the premise.

Your best effort doesn't require more .... effort ?

What kind of work is it that you do? I'd love to join.

If sitting around idly at low-paying jobs watching paint dry wasn't an easier way to achieve a paycheck than the hard work that the employer would prefer you to do then it wouldn't be the world's most common trope.

It sure does have a mental and physical cost.

Lol, EVERY last company I've worked for talks about how we are their 'family'. When layoffs come it looks a whole lot different. They talk family when they are trying to get a few more off the book hours out of you.

The steady paycheck is the obvious first motivation, but really, I do it for two more things: 1) the sense of accomplishment, and 2) the occasional batshit-enormous award. Yes, they've used this lever to hoodwink me into working hard just for the possibility, but the legendary microsoft "gold star" award is no joke.

I work hard for myself not some employment ideal.

It's worth noting that many companies have cash hordes outside the US but need to make payroll inside the US. https://www.google.com/search?q=microsoft+repatriated+cash

I hope you keep your Uber drivers, Landscapers and Cleaning Ladies on retainers because you have so much cash in your brokerage/bank account

This is..not a bad idea? I know several people that kept paying their cleaning people during COVID despite them not being able to come, because they were remote workers and could easily afford it.

It's called noblesse oblige. People with means in their daily lives constantly make financially unsound decisions out of a sense of duty and responsibility.

That microsoft is cutthroat here, sure, it is the nature of transactional corporate relations, but it would be a sad, ugly world if individuals internalized this same dehumanizing ethos in their personal dealings.

I paid our cleaners during the first months of covid despite them not coming over... we've been using the same few people for almost a decade now. All the restrictions our governments created really fucked over people like them.

I don't uber/lyft, and I don't have cleaning staff. I do keep the lawn company coming, without too much respect to the amount of savings I have. There was a time when I didn't, but... if keeping these extra services amounts to less than a single percent of my cash on hand, I'll likely keep them going.

My roommate and I literally kept our maid on retainer during COVID when she could not come.

You can double those numbers if you consider all additional costs.

Companies that think that way wouldn’t get to the point of having that kind of cash.

Furthermore, efficiency only increases in importance as companies grow.

They also want to spend $68b on Activision which might put a bit of a dent in that cash hoard.

> frustrating to get be part of a 5% cut when there's so much free cash sitting around. I know, it's a narrow view of corporate finance, and I don't have the 'big picture', but... still doesn't sit right with me.

nobody is entitled to be an employee, the purpose of corporations isn't to print employment numbers, these observations you made should be unrelated

Capitalism is a failure. Everyone should be entitled to money.

Also pretty disconcerting that they're doing this at the same time that they're pumping billions into OpenAI (a company with near zero revenue) at a $30 billion valuation.

Re: the "loaded cost", back when I worked for MSFT in the early 2000's, the rule of thumb for management was $250k per person total cost. This is when $125k was considered a pretty good SDE salary. So I'd double your $3b.

Yes exactly. There is much more than just "benefits". Cost of office space, computer equipment, office supplies, electricity, janitorial costs, heating, security, servers, IT overhead, etc. When you take ALL these costs and spread them over the company, the loaded cost of an employee is not "mostly" salary.

Let's say you're within the ballpark.

A three year savings of $10B would be equal to their stated investment into OpenAI. Assume there is a global slowdown, and a corresponding decline in revenues; layoffs may be the way they've decided to free up cash flow to pay for the investment.

MSFT seems to be willing to invest $10B in OpenAI. It's not clear how they'll make that money back as OpenAI hasn't done much to monetize things like chatGPT.