MSFT Stock Had A Rough Ride Past Year And The Satya Nadella-Led Company Is Now Reportedly Mulling More Job Cuts — This Time Focused On Managers And Non-Coders
In a bid to bolster the coder-to-manager ratio, Microsoft Corp. (NASDAQ:MSFT) is reportedly contemplating another wave of job cuts, primarily targeting middle managers and non-coders.
What Happened: The Satya Nadella-led company is looking to expand the “span of control,” or the number of subordinates under each manager. The exact figure of potential job cuts is yet to be determined, but it could have a substantial impact on certain teams, reported Business Insider
Internal discussions at Microsoft center around lowering the “PM ratio,” a measure of product or program managers to engineers. This concept, known as the “builder ratio,” was introduced by Microsoft’s security chief, Charlie Bell, during his tenure at Amazon (NASDAQ:AMZN). It gauges the ratio of software engineers to “non-builders” such as project and program managers.
For example, Bell’s security division currently works with roughly 5½ engineers for each PM, aiming for a 10-to-1 ratio. The proposed cuts would require managers to adhere to a specific budget and team-based ratio.
Microsoft uses a “ManageRewards slider” to evaluate employees on a scale from 0 to 200. These ratings determine the amount of stock awards and cash bonuses an employee receives.
Microsoft did not immediately respond to Benzinga’s request for comment.
Why It Matters: This move follows earlier job cuts this year when Microsoft targeted employees not meeting performance expectations. Earlier this year, Microsoft let go of around 2,000 employees deemed as underperformers. The impending cuts could also target low performers, potentially including those who scored an “Impact 80” or below in performance reviews for two straight years.
Recently, the tech giant also dismissed two employees who disrupted its 50th-anniversary event in protest of the company’s contracts with Israel.
In the tech sector, companies are reducing middle management roles to improve efficiency. Amazon is aiming to have more individual contributors compared to managers, and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has cut 10% of its vice president and manager positions as part of a similar effort.
The proposed job cuts reflect Microsoft’s ongoing efforts to streamline operations and enhance productivity by focusing on a higher coder-to-manager ratio.
After President Donald Trump announced a 90-day pause on tariffs, Microsoft stock climbed over 10% on Wednesday to close at $390.49, as per BenzingaPro. However, it has lost nearly 8% over the past year.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: benzinga neuro Donald Trump KeyProj Microsoft Microsoft StockNews Markets Tech
