Huge layoffs due to recession, a possibility in tech industry?

Sep 30 18 Comments

I work as a software developer at Microsoft. SDE2 (62). Can big companies (FAANG + Microsoft) handle a recession without needing to layoff employees?

Or would they try to keep their employees at a paycut? Or would they do what any profit oriented company would do?

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  • Bloomberg 929449288
    Take a look at the profit margins, annual revenue and annual operating costs and figure it out for yourself. With Microsoft's very high profit margins (as a percentage of revenue), layoffs seem unlikely even in the event of a 30% drop in its stock price and/or revenue.
    Sep 30 6
    • Microsoft FlyingOwe
      You have no clue what you’re talking about. Company layoff because they can.
      Sep 30
    • Bloomberg 929449288
      Sure. But MSFT's situation is totally different from that of Uber and Lyft, which MUST lay off employees in order to become profitable.
      Sep 30
    • Thumbtack / Eng bgse43
      The number of people Uber laid off would make very little impact on the 1.5b loss they are trying to bridge. The main reason is to cut deadweight
      Sep 30
    • Bloomberg 929449288
      Actually, Uber's layoffs could make a big dent in that $1.5B. Their average engineer earns a median annual total comp of $275k according to Blind's data. Based on the look of their comp distribution, the average is at least $300k. The annual cost to the company is far higher, including health insurance, dental insurance, vision insurance, free food, 401k matching, office space and expensive equipment like self driving cars and Mac computers. Conservatively estimating a cost of $375k per Uber engineer, $1.5B amounts to 4,000 Uber engineers. Laying off only 2,000 already cuts the annual losses in half. And if they axe ATG, they can cut losses in half by laying off far fewer engineers
      Sep 30
    • Thumbtack / Eng bgse43
      I believe it’s 1.5b per quarter (6b+ annualized)
      Sep 30
  • Thumbtack / Eng bgse43
    Only thing you should know is any company can layoff anytime. Doesn’t have to be a financial situation - they can lay-off with org streamlining as a reason.
    Sep 30 1
    • Booking.com
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      Exactly. Microsoft had a big layoff when Satya took over
      Sep 30
  • Capital One / Finance Rexxar
    Huge layoffs due to a recession is possible in any industry. Depends on the magnitude of the recession. Largest layoffs will hit the industry that bubbled. Tech is here to stay though so while they may get laid off, they will also probably have an easier time getting re-employed.
    Sep 30 0
  • Microsoft / Eng Leet_God
    Dude, why not. We have a lot of deadload here. We could practically cut 30% of people and still be the same.
    Sep 30 1
    • OP
      But will they layoff randomly or based on performance? I'm going to start soon, and just worried that I won't have enough time to prove my worth
      Oct 1
  • Netflix A maj7
    As someone who worked through the last Great Recession, yes....layoffs will happen. Bigly. Microsoft shed 4K jobs. Security showed, a list of names was named and people had 1 hour to pack their things. Another list was read and those people had 30 days to find another role in the company or they’ll be fired.

    All big tech companies are much larger now, so a massive recession will have a bigger impact.

    Make sure you have some good savings built up.
    Sep 30 1
    • OP
      Yeah. I'm on with Visa. so need to worry several times more.
      Oct 1
  • Honeywell 10char
    There is no such consideration anymore to keep people employed at a loss. It’s just labor capacity, utilization and productivity - numbers in the financial calculations. All while CEO’s enjoy severance bonuses in case they run the company to dirt.
    Sep 30 0
  • Amazon n1Uwbwo0
    Depends on how badly they do. Even Lehman brothers folded overnight so it's possible, but unlikely
    Sep 30 0
  • Kabbage / Data fxnM15
    Recessions are usually followed by layoffs.
    Sep 30 0
  • OP
    Damn.. that's disheartening..
    Sep 30 0

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