Macroshaft Finds Cheapest Way to Cut a Quarter of Its Staff: Make It Their Idea

Macroshaft has offered voluntary exits to up to 60,000 of its roughly 223,000 employees in the US, UK, Canada and India. Staff must decide in early December and leave on 31 December. The offer comes three months after 4,800 people were laid off, and the company says it has no target for how many will accept. Dsrupt spoke to Naveen Kapoor, the chief executive who runs the software giant now charging customers by how much AI they use.

“A layoff has a decision-maker. A voluntary exit has sixty thousand, and none of them is me.”

Is this a layoff?

No. A layoff is something the company does. This is something the employee does, with our support. The headcount comes out the same, but the verb is different, and the verb is what goes in the memo. It is also what the lawyers read. They have never once read a headcount.

'Support' is the part people ask about. It means a payment similar to severance, plus career planning resources. We were very clear that it is not severance. Severance has a decision-maker, and a decision-maker has a name that ends up in a headline.

The company says it has no target. How many do you expect to leave?

We have no target. We have a number we would be pleasantly surprised by, and we are not sharing it, because people would feel measured. They would be right, but they would feel it first. Our retirement offer earlier this year was accepted by more than 30% of those eligible. We called that learning.

Sales, marketing and security are mostly excluded. Why?

Eligibility is not based on age, length of service or performance. It is based on proximity to the customer's signature. Marketing convinces the customer they are missing out on what we have. Security convinces them we are the safe choice, which is a comforting thing to hear from the people holding their data. Sales then locks them into a five-year deal, justified by a review of their past usage. Between them, they create the fear, sell the solution, and lock in that recurring revenue. That is the whole business. About a quarter of the rest is overhead with a blue badge.

And the overhead has been expensive. It has spent the year doing its work through Clod, a rival's assistant that bills by the token. We put an AI button on the keyboard, and our own people walked past it to pay somebody else's meter. That is not a productivity gain. It is a competitor's invoice with our name in the cost centre. We were paying staff to buy a rival's tokens to do the work we were paying the staff for. We have decided to stop paying the staff.

Won't the best people take the money and go?

Anyone who leaves is, by definition, someone with a better offer. Anyone who stays is someone who has learned to love us, or who has looked at the job market. We call that self-selection. It is a talent strategy carried out entirely by the talent, at no cost to the strategy department.

Why now?

We are building very large, very expensive buildings for AI to live in. A building cannot accept a buyout. A building also cannot run up a Clod bill. People can do both, and only one of them is voluntary. Our free cash flow is positive, and we intend to keep it that way by making the staff the variable.

Our chief people officer has noted that the offer is new for us. We will learn from it, through metrics.