Today: 96K FTEs, >70K contract employees. Not a sustainable model. In my recent return as contractor, the most critical functions of the group were being outsourced. Not uncommon, and quite unhealthy. I had the impression the company is coasting, vs. augmenting competitive status.
Continued difficulty coming up with an eval/comp system that gets the best results, near and long -term. Vision for human capital has become somewhat hidebound - e.g. "once a tech PM, always a tech PM"
Culture largely fear-based, which inhibits cooperation, team-building, max creativity and ROI. I saw the worst "back-stabbing" behavior during the two recent contract gigs - quite noticeable.
Loss of strategic vision, especially technological, since Bill Gates' departure - witness, failures like Kin (a Windows phone). MS has lost a lot of executive talent which is has failed to replace, and has tolerated quite a few executives (I mean GM level and above) who should have been culled long ago. Lack of exceptional leadership has demoralized rank-and-file. A direct quote from group leader: "Make the decision that insures I don't lose my job." Yes, that was the sole criterion provided for business guidance.