Microsoft is once again sharpening the knife on workforce structure, with internal discussions hinting at a fresh wave of job cuts as early as May.

While the final decisions remain under wraps, sources close to the matter suggest that the upcoming changes could hit middle management particularly hard, signalling a broader shift towards leaner, coder-heavy teams, according to an initial report by Business Insider.

Fewer middle managers for leaner teams

Several senior leaders across Microsoft have been evaluating the ratio of technical staff to non-technical roles, particularly product and programme managers.

The goal is to tip the scales in favour of those who build, not just those who oversee. As one insider put it, the company wants to expand the “span of control” – that is, increase the number of direct reports per manager – thereby flattening the hierarchy and amplifying the presence of hands-on technical talent.

This approach aligns with a wider industry trend. Big Tech peers such as Amazon and Google are already streamlining their ranks of middle managers in favour of individual contributors.

In December, Sundar Pichai revealed Google had trimmed its vice president and managerial ranks by 10%, citing the need for greater agility and output per head. Amazon, meanwhile, has been focused on boosting its ratio of builders – engineers and technical contributors – to non-builders.

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At Microsoft, the terminology varies but the same philosophy reverberates. In its security division, led by former Amazon executive Charlie Bell, the focus has been on increasing the “builder ratio”. This metric, borrowed from Bell’s Amazon playbook, measures the number of software engineers relative to programme and project managers.

According to a source familiar with Bell’s plans, the current ratio in his security team stands at roughly 5.5 engineers per product manager, with an ambition to double that to 10:1. It’s a move designed to ensure that more of the team’s headcount is directly engaged in product creation rather than coordination.

One insider described the builder ratio as a rough proxy for how many people actually write code. With that in mind, some teams are reportedly being asked to adjust their structure – and budgets – to meet new ratio targets.

This suggests that upcoming job cuts may be less about sweeping redundancies and more about surgical restructuring, tailored to team composition and performance.

More stringent performance measures

Performance, too, is under the microscope. Earlier this year, Microsoft parted ways with around 2,000 employees who were tagged as low performers. Now, there’s talk that this criteria could extend further. Staff who have received an “Impact 80” rating or lower for two consecutive years may be next in line for exit conversations.

The company’s internal review system, known as the ManageRewards slider, rates employees on a 0 to 200 scale. The midpoint is 100, with scores like 0, 60, and 80 seen as underperformance. Higher ratings such as 120, 140, and up to 200 unlock more generous compensation.

Those rated Impact 80, for instance, receive only 60% of their typical stock award and up to 80% of their maximum bonus, a signal that their contribution is seen as falling short.

While Microsoft has yet to publicly confirm any impending cuts, the company is believed to be scaling up on efficiency and pushing managers to do more with less to ensure that every seat at the table is filled by someone adding tangible value.

If these plans move forward, the shakeup could be substantial – not just a trim around the edges, but a deeper pruning aimed at future-proofing the organisation.

For HR and business leaders, Microsoft’s manoeuvre offers a timely case study in the art and science of organisational redesign. The company faces intense pressure to weigh operational efficiency against team morale, productivity against people-first values.

But, as the tech sector grapples with slowing growth and rising expectations, the exercise – if it pushes through next month – suggests that the days of bloated middle management may well be numbered.