Microsoft’s security chief Charlie Bell, formerly a senior Amazon executive, is believed to be one of the key figures driving this approach within Microsoft.

Microsoft is reportedly preparing for a fresh wave of layoffs in May 2025, with middle management roles set to be the most affected, as the tech giant seeks to reshape its organisational structure and boost engineering efficiency. The planned job cuts, first reported by Business Insider, are part of a broader strategic move to reduce layers of management and increase the ratio of technical staff to non-technical employees.

According to people familiar with the matter, the layoffs could impact a significant number of roles, although the exact figure has yet to be confirmed. The company is said to be aiming for a more streamlined hierarchy by increasing the “span of control” for managers — in effect, having each manager oversee more employees. This shift is designed to cut bureaucratic overhead and prioritise hands-on, technical contributions within project teams.

The restructuring will primarily target middle managers and programme or product management roles — positions that are considered non-essential in Microsoft’s current push for operational efficiency. Internally, the company is reportedly focusing on reducing what’s referred to as the “PM ratio” — the proportion of managers to engineers — across teams. This reflects a broader industry trend among tech giants towards flatter, more agile organisations.

A similar strategy has been implemented at Amazon under CEO Andy Jassy, where the “Builder Ratio” is used to measure the number of engineers versus non-engineers. Microsoft’s security chief Charlie Bell, formerly a senior Amazon executive, is believed to be one of the key figures driving this approach within Microsoft.

The move follows around 2,000 job cuts earlier this year, which the company attributed to the removal of underperforming employees. The upcoming round of layoffs could again target those lower on Microsoft’s “ManageRewards slider,” the internal performance evaluation system.

Microsoft’s restructuring efforts echo the broader efficiency drives across the tech industry. In December 2024, Google CEO Sundar Pichai announced a 10% reduction in vice president and management positions to flatten its hierarchy and accelerate decision-making.

Industry observers note that the drive for leaner structures is also being fuelled by the increasing integration of artificial intelligence (AI) across product development cycles. In a recent interview with Stratechery, OpenAI CEO Sam Altman suggested that AI could eventually reduce the demand for software engineers altogether. “Each software engineer will just do much, much more for a while,” Altman said, hinting at a future where smaller, more productive teams could replace larger developer workforces.

While Microsoft has yet to issue an official statement, the anticipated restructuring highlights a growing trend among tech companies to consolidate roles, cut managerial layers, and prioritise engineering capabilities as AI continues to reshape the digital landscape.

As one of the world’s leading technology companies, Microsoft’s organisational shifts may signal what lies ahead for other tech firms navigating the balance between innovation, automation, and workforce efficiency.