Hi Reader,
This week, Microsoft announced something it has never done in its 51-year history.
A voluntary buyout. Open to about 8,750 employees, roughly 7 percent of its US workforce. Details land May 7.
There is an eligibility rule. And the rule is the story.
It is built on two numbers. Neither has anything to do with whether the person is doing the work. No performance score. No project record. No measurement of contribution. Just two numbers anyone can pull from an HR record without ever looking at output.
Pause on that.
A company famous for engineering precision has built a workforce-reduction tool that uses zero information about effort. The formula will run cleanly whether the employee is the top performer in their division or the lowest. Same envelope. Same offer. Same door.
So what are the two numbers?
Your age. And your years of service.
Add them. If they total 70 or more, you qualify. A 45-year-old who has been at Microsoft 25 years. A 52-year-old who has been there 18. A 60-year-old with 10. The formula does not care which one you are. It only cares that the two numbers add up.
Now ask the obvious question. What is the formula actually optimised for?
The answer is salary cost. People who clear the threshold are, on average, the most expensive people Microsoft employs at that level. They have collected raises, bonuses, and equity for years. Their pay is higher because their tenure is longer. That is the only thing the formula is reading.
Microsoft is not removing the wrong people. It is removing the most expensive replaceable people. The formula is honest about that. It would not survive the question “is this person carrying their weight?” because that question requires data the company does not have, or does not want to use.
The deeper signal is what the formula reveals about how Microsoft actually saw its team. For decades, the company has measured headcount, salary band, and tenure. It has not been measuring effort tagged to outcome by name and date. If it had, the formula would say: people whose contribution to the last twelve months has fallen below a threshold can take the package. That formula does not exist. Because the data does not exist.
If you run a business, ask the same question. If you had to cut 7 percent tomorrow, would your formula look like Microsoft’s, or different? Age and salary band, or actual work tagged to actual people?
The company that does not measure effort can only cut by demographics.
Don’t set goals. TAME the effort.
See you next week!
