Microsoft is feeling the sting after hosting what’s being described as an “intimate” concert for executives at a Davos ski resort the night before the company announced it would lay off 10,000 employees.

The Switzerland concert for 50 Microsoft executives attending the World Economic Forum featured iconic recording artist Sting, according to the Wall Street Journal.

“The concert would end up sounding a sour note to some employees at Microsoft the next morning,” WSJ reported. “On Wednesday—while much of the company’s leadership team was halfway around the world from its Redmond, Wash. headquarters—it announced plans to lay off 10,000 people. It was the largest round of layoffs Microsoft has had since 2014, and as CEO Satya Nadella would explain in a blog post, reflected the need for the company to adapt to a global economic slowdown.”

While it’s not clear if Sting, whose legal name is Gordon Matthew Thomas Sumner, was paid for the performance, the former Police frontman commands upward of $500,000, according to booking agency AAE Music.

The company had more than one round of layoffs last year, the article noted, though Microsoft didn’t announce how many positions were cut — the company did say layoffs that started in July affected less than 1% of the company’s total workforce of more than 200,000 people.

WSJ also shared that Nadella had a “major presence” at the World Economic Forum, being interviewed on stage for a Wall Street Journal panel, speaking about the promise of artificial intelligence in another appearance, and discussing how the tech industry will need to do more with less in a third event.

Nadella announced the morning after the Sting concert that Microsoft will lay off 10,000 workers in an effort to trim costs amid economic uncertainty and to refocus on priorities such as artificial intelligence, the New York Times reported. The CEO told employees the layoffs “are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.”

“Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today,” Nadella said in a memo to employees, after saying “we’re living through times of significant change.”

While the optics are certainly bad, the concert and the layoffs are two separate things, as some on social media tried to explain:

Workforce is a recurring expense. Sting is a one time expense

But also Layoffs aren’t necessary at some of these tech giants. They’re an optics move to appease shareholders because headcount is a glaring operational expense that can be reduced

To improve shareholder value

— Vikram Ramalingam (@VRAMM17) January 20, 2023

Hire Sting – marketing expense, which lowers net income and the tax you have to pay.

Layoff workers – upfront severance cost, which lower net income and tax for current year. In the long run, reduces future payroll -> improves forecast and outlook.

— Hypocrisy Watch (@hypocrits_watch) January 21, 2023

Companies are not socialist charities. Two independent decisions. Also, as an aside, many companies have arrangements with artists to both use their music for ads, etc. and get a “free” show as part of the package.

— Mark Stryshak (@mstryshak) January 21, 2023

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Tom Tillison

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The longest-tenured writer at BizPac Review, Tom grew up in Maryland before moving to Central Florida as a young teen. It is in the Sunshine State that he honed both his passion for politics and his writing skills.

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