In the corridors of Microsoft’s sprawling Redmond campus, a seasoned engineer named Phil Coachman reached a breaking point earlier this year. After nearly two decades at the tech giant, Coachman resigned in January, citing a profound erosion of employee morale and a seismic shift in company culture. His departure underscores a broader unrest within Microsoft, where waves of layoffs have reshaped the workforce amid aggressive pushes into artificial intelligence.

Coachman’s story, detailed in a recent report, highlights how the company’s “Great Flattening”—a strategy to reduce managerial layers and prioritize technical talent—has left many feeling undervalued and insecure. He described an environment where promotions stalled, and the focus shifted heavily toward AI-driven efficiencies, often at the expense of long-term employees.

The Toll of the Great Flattening

This flattening initiative, which Microsoft has pursued aggressively in 2025, involves cutting thousands of jobs, particularly in management and non-coding roles. According to Business Insider, Coachman witnessed firsthand how these changes fostered a “culture of fear,” with colleagues anxiously monitoring internal memos for signs of further reductions. The company has laid off over 15,000 employees this year alone, including a recent round of 40 in Washington state, as reported by The Economic Times.

Beyond the numbers, insiders point to a deeper malaise. Coachman noted a decline in collaborative spirit, replaced by a more cutthroat atmosphere where AI adoption became mandatory, pressuring staff to adapt or risk obsolescence. This aligns with accounts from anonymous forums like Blind, where tech workers express widespread anxiety over job security, as covered in another Business Insider piece.

Navigating a Tough Job Market

Despite the challenges, Coachman’s transition offers a blueprint for resilience in a volatile tech sector. After resigning, he leveraged his network and skills to secure a new role at another firm, emphasizing proactive job hunting and skill-building in AI. He advised others to treat their careers like startups, diversifying income through side businesses—a strategy echoed by a laid-off Microsoft engineer who prioritized his side hustle for security, per Business Insider.

The broader context reveals Microsoft’s strategic pivot: even as it reports record profits, CEO Satya Nadella has framed layoffs as an “enigma of success,” balancing cost cuts with massive AI investments exceeding $100 billion, according to WebProNews. This includes tightening return-to-office policies, mandating three days a week for nearby employees starting in 2025, which could exacerbate morale issues.

Implications for Tech’s Future Workforce

For industry veterans, Coachman’s exit signals a warning about the human cost of rapid transformation. Microsoft’s moves mirror those at peers like Meta and Oracle, part of a 2025 layoffs wave documented in Business Insider‘s ongoing tally. Employees are increasingly turning to side ventures or swift job switches to mitigate risks.

Yet, optimism persists. Coachman, now thriving in his new position, views his resignation as a necessary reset. As Microsoft doubles down on AI-centric reorganization, the challenge for leaders like Nadella will be rebuilding trust without alienating the talent that powers innovation. In an era of relentless efficiency drives, stories like Coachman’s remind us that corporate cultures, once fractured, require more than memos to mend—they demand genuine investment in people.