people like to keep the bad hires around for when the CFO comes and says you need a haircut. it's kind of gross how many of these big corps work

Sometimes you can have an employee that just lacks motivation, and keeping them around while hoping to motivate them one day is cheaper/easier than finding a new hire, when hiring is super competitive.

MS may have less time/patience for these people right now.

It is, but it's difficult to do, needs documentation, etc., and most managers in Big Tech would rather not do it unless required to from above (which is what a layoff gives them the opportunity to do).

The overhead of managing someone out is far higher than that of a mass action laying off hundreds or thousands. I'm not saying I agree with sentiment.

There's very little incentive for managers to cut bad hires. It is a tedious process (involving HR, PIPs, lots of paperwork), and firing people always looks bad. Most will just choose to let them hang around and give them unimportant tasks.

Plus, when upper management mandates that you have to fire 10% of your org, well now you have all these people you can put on the list with zero impact to the product.

BigCo has a tedious process of getting rid of bad hires. Most managers are not going that path unless they are forced to.

I think that some companies buy up all available talent to deny their competitors hiring pool.