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Microsoft is reportedly evaluating further workforce reductions, with internal discussions pointing to a focus on streamlining middle management and rebalancing team structures in favour of software engineers.
The shift would be in step with broader tech sector efforts to improve operating efficiency and productivity, particularly by adjusting the ratio of coders to non-coders across business units.
According to senior insiders, the restructuring could begin as early as May. Managers and programme leads are among those under review, as executives weigh how to increase what is internally referred to as the “span of control” - the number of direct reports assigned to each manager.
Microsoft is also said to be analysing team composition ratios, particularly reducing the presence of programme and product managers relative to engineers.
The approach reflects a methodology known internally as the “builder ratio,” which measures the proportion of engineering staff to other roles. Brought over from Amazon by Microsoft Security Executive Charlie Bell, the builder ratio concept has taken hold across certain units, with targets set to increase this ratio significantly.
In Bell’s security division, for instance, the current engineer-to-programme manager ratio stands at approximately 5.5 to 1, with ambitions to move to 10 to 1.
Performance metrics tied to restructuring plans
While exact figures remain unconfirmed, one source suggested the forthcoming cuts could affect a significant share of their team. Plans under consideration include imposing tighter budget constraints and minimum performance thresholds, using Microsoft’s internal “ManageRewards” system as a guide.
The company scores employees on a 0-200 scale, influencing bonuses and stock allocations. Individuals who receive an “Impact 80” rating, equal to 60% of standard stock awards and 80% of maximum bonus payouts, for two years in a row could be among those selected for redundancy.
This latest move would follow an earlier round of job cuts, in which approximately 2,000 employees were let go earlier this year. Many of those were also classified as lower performers under Microsoft’s performance review system.
Although Microsoft has not issued a formal comment, the reported plans place it among a growing number of technology firms recalibrating management layers. Google and Amazon have made similar moves in recent months.
Google cut a tenth of its management and vice president roles in December, while Amazon has been working to raise the number of individual contributors relative to managers across departments.
Implications for HR and leadership models
The developments at Microsoft illustrate the rising influence of engineering-centric models in workforce design, particularly in high-stakes innovation sectors like cloud computing and artificial intelligence. As firms seek leaner, faster-moving structures, the role and volume of middle management is increasingly under scrutiny. The changes raise strategic questions around leadership development, succession planning, and maintaining team cohesion amid flatter organisational hierarchies.
