‘Microsoft has to change to survive’: Ex-worker calls for leaner workforce and AI-driven operations

Former Microsoft employee Merill Fernando has called for a significant shift in how the technology giant operates, arguing that the company needs fewer employees, less organisational bureaucracy and a stronger focus on AI-powered, agentic work to remain competitive.Merill Fernando argues that Microsoft’s layers of management and fragmented teams have hindered adoption of beneficial technologies. (Representative)In a post reflecting on his departure from Microsoft three months ago to start his own company, Fernando acknowledged the human cost of the company's workforce reductions, saying the layoffs had deeply affected former colleagues, their families and their children. However, HT.com cannot independently verify the claims made in the post.Microsoft offers voluntary buyouts to 60,000 workersFernando's post comes a day after Microsoft announced that it is extending a voluntary severance package to roughly 60,000 qualified employees in the US, the UK, Canada and India. The program is designed to assist personnel exploring alternative career paths by offering monetary assistance. As the organization prioritizes substantial investments in artificial intelligence, it is simultaneously working to optimize operational costs. Qualified staff members will receive mails outlining the specifics and conditions of the offer, as per the company.Also Read: Former Microsoft director opens up about life after voluntary exit in July: ‘Six months of pure vibes‘I see the hurt it’s causing my ex-colleagues': Fernando on voluntary exitsFernando further claimed in his post that two weeks after he left Microsoft, his entire team in Australia was let go.“I see the hurt it’s causing my ex-colleagues, their families and their kids,” he wrote, acknowledging the impact of layoffs, forced relocations and performance improvement plans (PIPs).Despite recognising the personal toll, Fernando argued that Microsoft's underlying problem is structural, suggesting the company has accumulated too many employees, organisational layers and internal divisions.Organisational silos slowing innovationDrawing on his experience working inside Microsoft, Fernando said the company's structure is characterised by numerous small organisations, overlapping management layers and silos that make it difficult to implement improvements consistently across the business.He cited the adoption of managed identities as an example of how internal fragmentation can delay technology initiatives, even when they offer clear security benefits.The Entra team introduced managed identities in 2017, providing a way for applications and services to authenticate without developers having to embed secrets in their code. However, Fernando said adoption across Microsoft was initially slow, with individual teams operating according to their own priorities and decision-making processes.According to his account, it took a security breach and the subsequent launch of Microsoft's Secure Future Initiative (SFI) to drive broader adoption across the company.Fernando argued that the experience demonstrated how organisational complexity can prevent beneficial technologies from being implemented quickly, even within a company with Microsoft's resources and technical capabilities.Agentic AI could accelerate enterprise transformationFernando believes the rise of AI agents presents an opportunity to overcome some of these longstanding organisational challenges.He argued that in a business environment built around AI agents and smaller human teams, initiatives that once took years to implement across Microsoft could potentially be rolled out in months.Competition from OpenAI and AnthropicFernando also pointed to the rapid pace of innovation at OpenAI and Anthropic, arguing that both companies are currently shipping products and capabilities faster than Microsoft.Fernando's remarks come amid continued debate about workforce reductions across the technology sector, where companies are balancing cost pressures, strategic restructuring and increased investment in artificial intelligence.Fernando's central message, however, is clear: Microsoft cannot rely solely on its existing scale, customers and infrastructure to maintain its position in an increasingly competitive AI market.“Microsoft has to change to survive,” he concluded.