Microsoft Plans Fresh Layoffs Targeting Middle Managers to Boost Engineering Efficiency: Report

In a shift toward a leaner structure, Microsoft aims to reduce its “PM ratio” by trimming non-coding roles, with layoffs possibly beginning as early as May.

New Delhi | April 10, 2025 — Microsoft is reportedly preparing for a fresh wave of layoffs, this time focused on middle managers, as the company looks to optimize project teams by increasing the number of software engineers relative to non-coding roles.

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According to a Business Insider report, the layoffs could start as early as May, though the exact number of job cuts remains unknown. The primary goal is to reduce the “PM ratio”—the number of product managers (PMs) and program managers per engineer—within teams.

For example, Microsoft’s security division currently has a 5.5:1 engineer-to-PM ratio. The target is a more efficient 10:1 ratio, the report states.

Amazon Influence & Charlie Bell’s ‘Builder Ratio’

The restructuring push is being led by Charlie Bell, Microsoft’s security chief, who previously served at Amazon. He introduced the “Builder Ratio” concept—originally used at Amazon to track the number of engineers relative to non-builders like managers. Microsoft has adapted it to its own framework in an effort to promote engineering-heavy teams.

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This approach is part of a broader industry trend. Google CEO Sundar Pichai recently revealed a 10% reduction in VP and manager roles at Google, signaling a similar shift towards flattening organizational structures.

Layoffs May Target Low Performers Too

The new round of layoffs might not be limited to rebalancing team ratios. Microsoft is also reportedly considering axing employees who scored below an “Impact 80” in their performance reviews for two consecutive years.

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Employees at Microsoft are assessed using the “ManageRewards slider,” which ranks them on a scale of 0 to 200. This score directly impacts stock grants and bonus allocations.

Earlier this year, Microsoft let go of around 2,000 employees, citing underperformance as the reason.

As the tech giant looks to streamline further, more layoffs targeting both non-technical roles and low performers may follow in the coming months.

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Microsoft layoffs, middle management, tech layoffs 2025, PM ratio, product managers, Charlie Bell, software engineers, Amazon builder ratio, tech industry, efficiency drive, Microsoft performance review