Microsoft Considers Mandatory 3-Day Office Workweek Amid Restructuring and Layoffs

Microsoft is reportedly considering a change in its remote work policy, requiring most employees to work in the office at least three days a week. This move comes as the company restructures and cuts jobs, but also continues to hire in key areas. If implemented, this change could affect staff who have enjoyed flexible work arrangements since the pandemic. An announcement is expected as early as September 2025, with changes potentially starting in January 2026.

Microsoft is reportedly considering a significant shift in its remote work policy, which could require most employees to work in the office at least three days a week. This move comes amidst ongoing workforce restructuring and job cuts, while the company continues to hire in key areas. The potential change could impact staff who have enjoyed flexible work arrangements since the pandemic. An official announcement is expected as early as September 2025, with any changes potentially rolling out as early as January 2026 [1].

The tech giant has been exploring changes to its flexible working guidelines, a page on their website reads, "No 'one size fits all'" [1]. This shift is part of a broader transformation that includes ongoing worker readjustments and an updated PIP framework to quickly exit underperforming workers. In July 2025, Microsoft laid off around 9,000 workers, following a previous layoff of 6,000 workers in May [1]. Despite these layoffs, the company has seen minimal changes to its overall headcount due to hiring efforts and broader restructuring.

Microsoft CEO Satya Nadella has likened the ongoing transformation to the 1990s PC and software revolution, attributing the shifts to evolving customer needs. The company has been aggressively expanding into the generative AI field, which could significantly improve its performance and create additional shareholder value [2]. Microsoft's Q4 earnings report showed substantial growth, with revenues increasing by 18.1% Y/Y to $76.4 billion, and operating income rising by 23% to $34.3 billion [2].

The potential three-day office policy could have implications for Microsoft's stock performance. While the company's stock has appreciated by over 20% since November, a discounted cash flow model suggests the fair value is $538.26 per share, with a street average price target of over $600 per share [2]. However, risks such as potential macroeconomic deterioration and AI hardware overbuild could impact the company's performance.

References:
[1] https://www.techradar.com/pro/microsoft-considering-remote-working-crackdown-workers-could-be-ordered-back-to-the-office-soon
[2] https://seekingalpha.com/article/4812443-microsoft-q4-this-stock-isnt-done-winning