What's behind Microsoft's plans to flatten management layers by cutting thousands of employees

Core Viewpoint - Microsoft is reducing its workforce by approximately 6,000 employees, or about 3% of its global workforce, to improve management efficiency and increase the "span of control" for managers [1][10]. Group 1: Job Cuts and Management Structure - The job cuts are part of a broader trend among major tech companies, including Amazon and Google, to flatten management layers and increase the ratio of individual contributors to managers [2]. - Microsoft has begun notifying affected employees in the US, who will remain on the payroll for 60 days, with variations based on local regulations globally [3]. - Insiders at Microsoft view the flattening of management layers positively, citing inefficiencies and the presence of many ineffective managers [4][5]. Group 2: Span of Control Goals - Microsoft does not have centralized goals for the span of control, but some leaders have set their own targets, such as increasing the number of reports per manager to eight for engineering managers and nine for security managers [6][7]. - The job cuts also aim to increase the number of coders on projects, reflecting an internal focus on optimizing the "PM ratio" [8]. Group 3: Rationale Behind Changes - The restructuring is part of Microsoft's efforts to reduce costs while investing significantly in artificial intelligence, with analysts noting it as a commitment to profitable growth [10]. - Earlier this year, Microsoft also made performance-based cuts, dismissing 2,000 employees identified as low performers and implementing a new performance improvement plan [11].