Microsoft originally encouraged its employees to work from home amid the coronavirus outbreak in 2020. This new flexible working arrangement then became an official “hybrid workplace” policy several months after the pandemic began, allowing managers to approve permanent remote work. Now that the pandemic has settled into endemicity, Microsoft wants employees to return to the office. And if some quit in response, well, that’s probably exactly what Microsoft is expecting.
Much like Amazon or Google before it, Microsoft is preparing a mandatory return-to-office policy, according to sources familiar with the company’s plans. Rumors of the return-to-office policy first emerged a few weeks ago internally at Microsoft, leading to plenty of speculation among employees. A recent Experiences + Devices all-hands call revealed that Microsoft’s senior leadership team is working on “some guidance” that will be announced to employees in the coming weeks.
I understand that Microsoft is preparing to announce a mandatory return to office of three days a week. The policy will apply to those who live within 50 miles of Microsoft’s Redmond campus, and some teams at Microsoft may even return for four or five days. Those individual team decisions will be made by executive vice presidents, and I understand that employees will also be able to apply for exceptions.
More than half of Microsoft’s 228,000 employees are in the US, and most of that 125,000 are located near the company’s Redmond campus just outside of Seattle, so this policy will affect a lot of Microsoft employees. Business Insider first reported the rumors of a return-to-office policy last week, and I understand it will be announced in September and then implemented in late January.
On that same Experiences + Devices all-hands call, Microsoft said that employees who spend three or four days in the office have higher Thriving Scores — a metric that measures employee well-being. Microsoft has been increasingly integrating the Thrive Global tool into Microsoft Teams, and using it to gauge how employees are feeling through questionnaires.
Scott Guthrie, executive vice president of Microsoft’s cloud and AI group, told employees last year that the company wasn’t changing its return-to-office policy unless productivity dropped. Microsoft has continued to post impressive earnings results over the past five years, even driving the company to a $3 trillion market cap recently — so productivity clearly hasn’t been a huge issue.
I’ve spoken to dozens of Microsoft employees in recent weeks about the upcoming return-to-office policy, and there’s a real split of opinion on it. Some employees are concerned about a mandatory return, especially given the local road traffic problems and the amount of time lost in travel.
Others are worried about Microsoft not having enough space for everyone to return at the same time, despite the company’s $5 billion headquarters expansion. Microsoft has vacated lots of spaces in Bellevue in recent years, including the 27-story City Center building, the two Bravern office towers, and the Advanta campus. It has also given up space in Redmond, in efforts to cut the costs associated with office space that isn’t being used as regularly anymore.
Microsoft’s campus renovation includes 17 new buildings to replace 12 old buildings and hold 8,000 additional employees. Seven buildings are now open, with others under construction or on hold. It’s still not clear when Microsoft will complete its sprawling campus overhaul, as the company hasn’t put a firm end date on construction.
This potential lack of space is already being felt by some employees who are using the office space regularly. Some teams have desks assigned to individuals, and others are hot-desking. One source tells me there often aren’t enough focus rooms for online meetings and some rooms aren’t large enough for bigger meetings. In some buildings, Microsoft has been squeezing in so many employees that they’ve run out of power, I’m told. Despite this, I understand Microsoft is aiming to provide dedicated desks to support employees returning for three days a week.
Other Redmond employees welcome the return-to-office policy, having spent the past few years working in vacant offices with empty cafeterias or half-empty connector buses around campus. I visit Microsoft’s campus regularly every year for product briefings and launch events, and it’s been eerily quiet recently — particularly with the empty, unfinished buildings.
It’s clear to me from talking to Microsoft employees that most will agree that this could be seen as a type of stealth layoff, months after around 15,000 roles were cut. Morale is already at an all-time low inside Microsoft, and if you’re not happy about returning to the office three days a week and you can’t get an exception, then that makes it difficult to continue at the company. It also seems like an easy way for Microsoft’s management teams to weed out “rest and vest” employees that are coasting along.
Microsoft’s return-to-office policy could also shape remote or hybrid working for other companies. Microsoft made a big deal about its hybrid workplace when it started reopening its headquarters, and it also marketed Microsoft Teams on the basis of being a tool that could help with the tension of meetings that include remote and in-person attendees. Before AI became Microsoft’s new focus, it even held a special “Windows Powers the Future of Hybrid Work” event.
A lot of companies followed Microsoft’s lead on remote work, and they may now be looking at its mandatory three-day return and thinking it’s a tacit admission that Teams doesn’t always work for everyone — especially if you’re a junior employee and you need to get face-to-face time with colleagues. Microsoft isn’t going quite as far as Amazon’s full return, or Google’s policy to force some remote workers to come back three days a week or lose their jobs, but it may well help revise a standard that many companies are already following.
- Microsoft brings GPT-5 to Copilot with new smart mode. I was expecting Microsoft to be ready with GPT-5 in Azure AI Foundry and Copilot, but the company was also ready with a larger simultaneous release of GPT-5 across consumer products. Copilot, Microsoft 365 Copilot, Copilot Studio, GitHub Copilot, and Azure AI Foundry all have access to GPT-5, with a new smart mode leading the way for OpenAI’s latest model in Copilot. Developers will also be able to use the model router in Azure AI Foundry “to ensure the right model is used” for the task or query. Microsoft put out a blog post with a “Microsoft ❤️ GPT-5” image, in a clear bid to downplay some of the reported tensions between the company and OpenAI.
- Israel is relying on Microsoft’s cloud for expansive surveillance of Palestinians. Microsoft CEO Satya Nadella reportedly met with the commander of Israel’s military surveillance agency in 2021 to discuss moving intelligence material onto Microsoft’s cloud servers. The Guardian reports that Microsoft’s cloud-based storage platform has “facilitated the preparation of deadly airstrikes and has shaped military operations in Gaza and the West Bank.” No Azure for Apartheid, a Microsoft workers group, calls it a “genocidal partnership,” and once again calls for an end to Microsoft’s contracts with the Israeli government. The group has previously organized protests at Microsoft’s campus, disrupted its 50th anniversary event, and also interrupted executives at Microsoft’s Build conference.
- Microsoft’s new Copilot 3D feature is great for Ikea, bad for my dog. Copilot got GPT-5 last week, but Microsoft also quietly launched a new Copilot 3D feature. It’s a free-to-use feature that can transform a regular 2D image into a 3D model that can then be used in game creation, animation, 3D printing, VR / AR, and much more. I was impressed with the results on Ikea furniture, but far less impressed with the results on humans or even my dog.
- A decade later, Windows is still bringing Control Panel features to the Settings app. It’s amazing that Microsoft is still working on bringing all of the Control Panel into the Settings interface in modern versions of Windows. I still love Control Panel, but I sure would like to be able to control all settings in a single place. Microsoft is now bringing clock settings, keyboard character repeat delay, cursor blink rate, and more into the Windows 11 Settings interface. Hopefully it doesn’t take another decade to get the rest of the Control Panel into Settings.
- GitHub just got less independent at Microsoft after CEO resignation. GitHub CEO Thomas Dohmke announced his resignation earlier this week, triggering GitHub to move even closer into Microsoft’s CoreAI team. GitHub moved into the CoreAI unit earlier this year after it was formed and consumed Microsoft’s platform and tools division and DevDiv teams. Microsoft isn’t replacing Dohmke, and the GitHub leadership will now report directly to CoreAI leadership instead. It’s interesting that Dohmke chose to highlight, in his memo, that GitHub is a “remote-first organization,” just weeks before Microsoft’s return-to-office policy announcement is due.
- Microsoft still can’t pick between Xbox PC and Xbox on PC. Last month, I highlighted that Microsoft seemed to be settling on using “Xbox on PC” instead of “Xbox PC” as a brand for its Xbox app on Windows, but now the company has used both in a single post on X this week. I’m confident that it’s supposed to be Xbox on PC now, but Microsoft seems to be having an HBO Max moment.
- Microsoft releases lightweight Office taskbar apps for Windows 11. Microsoft is starting to roll out lightweight taskbar apps for Microsoft 365 users on Windows 11. These taskbar apps will automatically launch at startup and provide quick access to contacts, file search, and calendar straight from the Windows taskbar. Only business users of Microsoft 365 will get access to these new companion apps, which is a shame because I quite like the idea of taskbar apps that give you quick and glanceable information.
- The Xbox app for Windows on Arm will soon let you download games. The gaming situation on Windows on Arm devices has been pretty tragic in recent years, especially with the Xbox app only providing access to Xbox Cloud Gaming streaming instead of game downloads. Now, Microsoft is testing allowing game downloads for PC Game Pass on Qualcomm-powered devices. Microsoft says it’s also “developing new features that will enable more games to be played on Arm-based Windows 11 PCs in the coming months.” This all sounds like good news if you own one of the new Surface devices that has a Qualcomm chip inside.
- Windows 365 Reserve is now in limited public preview. Windows 365 Reserve is a temporary cloud PC if your main PC is broken or unavailable. Businesses can now try out a limited public preview, allowing them to get employees up and running with up to 10 days of Cloud PC access a year. I’m not a fan of virtual PCs because I love the performance of a native PC or laptop, but I’d sure take a Cloud PC with all my apps and settings for the rare time that my PC has a wobble.
- Microsoft is experimenting with an AI-focused UI for its Edge browser. A prototype UI for Microsoft Edge, codenamed “Olympia,” has been discovered in some builds of Microsoft’s browser. The UI puts Copilot at the center of the address bar, as well as a floating tabs interface. It looks largely incomplete, and has likely been scrapped, but it’s interesting to see that Microsoft is looking at overhauling Edge as an AI browser. The discovery comes just as Microsoft launched its Copilot Mode for Edge, which is a subtle way of adding more AI-powered features to Edge.
- Satya Nadella shrugs off Elon Musk’s OpenAI jab. Nadella announced the simultaneous release of GPT-5 across plenty of Microsoft products last week, and xAI founder Elon Musk was quick to respond. “OpenAI is going to eat Microsoft alive,” quipped Musk, before Nadella responded in a far more graceful manner. “People have been trying for 50 years and that’s the fun of it! Each day you learn something new, and innovate, partner, and compete. Excited for Grok 4 on Azure and looking forward to Grok 5!” The timing is particularly interesting, as Microsoft looks to quietly preview Grok 4 on Azure amid safety fears that the AI model is not enterprise ready.
- Rod Fergusson is leaving Blizzard and Microsoft. Microsoft is losing another big name in the world of gaming. Rod Fergusson, who had been the general manager of the Diablo franchise for the past five years, is leaving Blizzard and Microsoft. Fergusson worked on the original Gears of War and was the studio head of The Coalition before moving to Blizzard in 2020.
- Microsoft finally provides an update on Forza Motorsport. After a month of radio silence following Microsoft’s latest layoffs, the Forza Motorsport team finally addressed the cuts made to Turn 10 Studios last week. “We wanted to assure players that Turn 10 and Playground Games will continue to support Forza Motorsport and Forza Horizon 5,” said Turn 10 in a post on X. I reported last month that Turn 10 Studios was hit particularly hard by the Xbox cuts last month, and that there are enough people left to keep Forza Motorsport up and running.
- Microsoft Edge will continue to be supported on Windows 10 until 2028. Microsoft is getting ready for the big Windows 10 support cutoff in October, and it’s now reassuring Edge users that they will continue to receive updates for a while yet. Microsoft is committing to Edge updates on Windows 10 “until at least October 2028,” which coincides with the end of the Extended Security Updates (ESU) program. The good thing is you won’t need the ESU program to continue getting updates.
- Microsoft’s Windows chief on the future of speaking to your computer. Microsoft’s head of Windows and devices, Pavan Davuluri, has been discussing the future of Windows for Microsoft’s own Windows IT Pro YouTube channel. Davuluri says “you’ll be able to speak to your computer while you’re writing, inking, or interacting with another person” in the future, as well as Windows becoming increasingly agentic. He also touches on the idea of Windows understanding the context of your screen, much like how Recall can take snapshots and make everything searchable. I’ve heard Microsoft make plenty of promises about talking to your PC over the past couple of decades that have never come to fruition, but I think the idea of using AI for assistance is definitely something Microsoft is leaning into right now.
I’m heading to Germany next week for Gamescom, so if you’re at the show please say hello. I’m looking forward to getting my hands on the new Xbox Ally handheld devices, and I’ll have plenty of impressions to share soon.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me at [email protected] if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at [email protected] or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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