Microsoft Rumored To Lay Off Thousands Worldwide 506
nandemoari writes "It seems not even Microsoft is impervious to the effects of this increasingly painful recession. According to reports, the Redmond-based company is preparing to lay off about 17 per cent of its entire workforce in the coming months.
Despite its portfolio diversity — including operating systems, antivirus software, and video game consoles — Microsoft is clearly feeling the pressure applied by a tightening global economy. In fact, there seems to be a sense of emergency to the massive cuts (about 15,000 workers out of 90,000), which rumors suggest should be made official by January 15."
It's about time. (Score:5, Interesting)
Lisa Brummel is a Microsoft Senior VP. She's in charge of human resources, and given some of her other decisions internally, I think she'll do the right thing and cut some weight from Microsoft.
Layoffs (Score:3, Interesting)
I know a few people in the NYC office who have been worried this week by the layoff rumor. Hopefully, Microsoft will streamline the company responsibly. It is unfortunate that so many companies are considering large layoffs, but it is hardly surprising. Many corporations are bogged down by redundancy or mediocrity in the workforce, and would benefit from a careful re-analysis. I know it's easy to jump to the "microsoft sucks" conclusion, but I'm afraid we will be hearing more of these stories from around the country in the next few months. I'm sure even the "evil" microsoft top executives are heartsick over the human cost (and bad press).
More stock drops? (Score:4, Interesting)
These are the kind of crappy rumors (like Steve Jobs is sick, OH NOEZ!) that cause stock to drop, and then Microsoft really will have to cut some jobs.
H1B issue will be key (Score:4, Interesting)
In theory they can't lay off a ton of people in the US without pushing the H1B's out the door first - but it's unlikely they'll want to lose a bunch of their most cost effective workers. Be interesting to see what happens, they could have layoffs without layoffs (say it's all performance based), or the US could escape most of the cuts while the rest of the world gets layoffs. Suspect we'll see soon.
You mean (Score:5, Interesting)
Re:More FOSS developers (Score:4, Interesting)
If i had a guess, I'd think a lot of the people getting laid off will not be the core software engineers... Part of tech support, part in their offshore offices (since they had stated it had caused them more than a little bit of problem in the past), and the people that everyone wants fired but never were (there's always a lot of those, in any team).
With a sub 20% number of layoffs, very, very few people with the actual talent and drive to work on FOSS would be part of the job cut...unless they do things such as close an office and fire everyone in, regardless of importance.
Re:Why? (Score:5, Interesting)
Specifically, layoffs are being used as a way of culling the bottom 10 or 20% of performers in order to improve the overall performance of the company.
That'll be interesting, then. By and large, every performance measuring I've ever seen has been flawed, and unless it was for very simple jobs, greatly so.
Especially in a development environment, performance is hard to measure. There are anecdotes en masse about people who contributed very little measurable output to a project, but when they were fired the whole thing went down the drain.
Cutting "low performers" has, in my experience, always been a sign of a company in financial trouble. One that desperately needs to save money in order to please stockholders, and employees simply are one of those "cutting costs opportunities" that stockholders love.
Re:Why? (Score:5, Interesting)
Re:It's about time. (Score:3, Interesting)
overhiring intentional when lot of turnover (Score:5, Interesting)
Comment removed (Score:3, Interesting)
Re:You mean (Score:4, Interesting)
Not really.
Most companies when faced with having to do layoffs offer buyouts. Those most likely to take a buyout package will be those who can easily find another job. Therefore most companies ending up culling the top 10-20%. From what I've heard (and I have no inside information on this) Microsoft is going to be doing targeted layoffs to counter the effect of the hiring binge they've been on for a few years now.
Re:Why? (Score:3, Interesting)
here here.
Man I just wish I could explain to business people the failure of performance measurement. I almost feel having no metrics is better than having bad metrics.
I worked for the largest telecom manufacturer and they had this really stupid policy where you had a target 'bug count'. Fix 1.5 bugs per week was the target. The problem is this resulted in people doing short hacky fixes instead of actually fixing problems. Heck you were rewarded for this. Just fix the immediate bug, then get another bug in the same area, fix it again. It was just stupid.
I'd almost say, you're better off just asking your employees to rate each other and their employer...and vice versa. I just haven't seen any metric that has actually produced positive results.
Re:Why? (Score:3, Interesting)
A portfolio full of billions in losses annually (Score:3, Interesting)
I am surprised that Microsoft is needing to reduce its workforce by so much but if WinPC shipments are down then they have to cut or it'll really show up on the books.
As far the statement of surprise at this move goes( "Despite its portfolio diversity" ), that portfolio is weighted heavily with financial losses and has been for over a decade. Something in the range of 80-90% of their profits come from 2 or 3 products( Microsoft Windows desktop and server, Microsoft Office ).
Now if the WinPC shipments numbers don't show a large decline, we can figure that a whole lot of businesses are not signing up for expensive bundled contracts and either are stagnating their IT infrastructure or are going elsewhere.
Then again, when was the last big financial shuffle at Microsoft? They used to do this every three years or so and it was a nice way to hide loss patterns and move some of those billions in profits around. I remember one shuffle left the Windows CE/Mobile division and MSN division with enough to show a onetime profit and was around the time they cut the R&D budget from $6.3 billion to around $3.1 billion. The press was all over the R&D cuts but totally missed how a lot of money got shuffled around.
This would be a good way to kill two birds with one stone. Re-org and reduce head counts in a slowing economy and pressure from open source around the world. IMO.
LoB
Re:Why? (Score:3, Interesting)
Cutting "low performers" has, in my experience, always been a sign of a company in financial trouble. One that desperately needs to save money in order to please stockholders, and employees simply are one of those "cutting costs opportunities" that stockholders love.
As Stephen J Gould pointed out, the only things that are "lean and mean" in nature are animals that can no longer hunt effectively and are dying.
Re:Why? (Score:5, Interesting)
At my work, if a ticket comes in at a certain severity, it's my task to close the ticket, and reopen it at a lower severity. THEN start working on fixing the problem. This doesn't help me serve the clients, but it does help improve our metrics. In fact I don't think I've once heard anything about improving customer service where I work in the past year, it's all about doing more work remotely.
Re:You mean (Score:4, Interesting)
I doubt that's what he was getting at. Surely you've noticed, by now, that team dynamic is an extremely important aspect to how productive a group of employees is? You could be the most capable person on the planet, with nobody out there knowing more about your field than you do... if you're a complete asshole and nobody wants to work with you, then bringing you onto the team will hurt productivity. There's simply no way that you will be able to cover the loss in productivity for the other 20 people you work with. Even if you produce the best work there is, removing you might improve the whole.
Likewise, even if you're producing the best work on the team, if you show up when you feel like it, leave when you want, take breaks whenever, and have been known to disappear for 3-4 hours without telling anybody, then the perception that's going to spread is that you're a slacker and don't care, and that impression is going to hurt morale and productivity. I actually had to remove somebody from my team last month for exactly that situation. (well, almost. he wasn't actually producing the best quality work, but he was doing the most work units, but otherwise exactly the same.)
It isn't a question of ass kissing. It's a question of soft skills and diplomacy, which is a skill set that I've found sadly lacking in most technical disciplines.
Re:Why? (Score:4, Interesting)
I recall a situation where we wondered why certain people had been laid off. Our layoffs generally tended to consist of volunteers to take the package, then low performers, and then finally people they simply had to cut to make the numbers. Unfortunately, every category had someone in it, but we tended to find that most people were in the first two categories, and very few were in the last.
When that layoff rolled around, however, we noticed that some very good people were getting cut, when at the the same time, some complete idiots were being kept on. As much as layoffs make any sense, we assumed that even if the reasoning was irrational for layoffs, that there was a rational system by which decisions were made.
In this case, our CTO admitted in a small meeting with some of us that they had been forced to make a major mistake. This was fairly candid, as I work for a major company and you don't usually hear a C-level say anything that gives away information to minions like us. For that matter, you usually don't ever see a C-level.
What he said was that their financial reporting, of all things, had forced them to not only take care of the layoff, but do it in a completely boneheaded manner. The parent company had stated in their reporting that they were taking a chargeback for a layoff in Q3, but a number of delays had forced them right to the deadline without them being able to implement it.
This was bad news, because if the layoff did not happen they would either have to do some sort of earnings restatement, or they would be in actual trouble.
Of course, the parent company decided that instead of the restatement, which would inconvenience them, they would pressure our subsidiary's executives to do a crash layoff. Since the delays ensured that there was not the needed time to do the necessary meetings with lower management and ensure that those folks were on message, they restricted input to VP level and all decisions were made on layoffs by SVP level.
So you may ask: How do VPs and SVP's make decisions about people whose names that they can barely remember, let alone know what they do?
The answer is that you hand them the performance reviews for every employee.
Sounds like a reasonable idea, right?
Wrong. It turns out that managers, even the ones we assume to be inhuman, prefer not to rock the boat, or they're just plain lazy. It also didn't help that we had major re-orgs recently, so those same managers would have have difficulty even if they had been completely diligent about reviews.
Therefore, unless the people under them were incredibly distinguished... or complete morons, there was a tendency to rate everyone under them as average and grant them all the same scores and similar, content-free comments.
Faced with a massive pile of employees who seemed to be no different than any other employee, they did their best to glean any actual idea of their relative performance out of the review. As you would expect, in some cases, they might as well have thrown darts at a list of names.
Our CTO went through the process and admitted afterwards that they had made a mistake. Performance reviews had ended up being useless forms that had to be filed so everyone got their pay and bonuses. Unless there were things that they could not avoid stating on them, a manager made all of his reviews would the same.
At the same time, he then said two more truths. There is technically no reason required to lay someone off, so this layoff was technically a success. And he also stated that we were far from done laying people off.
He did promise, however, that he would do his best to try and push back if something like this happened again. Considering the person, I think he might actually even try to keep his word. He'll probably fail, of course, but its comforting to know that someone much closer to the Board might actually say something.
So in the end, performance reviews are only as good as the process and the people conducting them. G
In theory, a company could be investing (Score:5, Interesting)
In theory, a company could be investing for a major project, esp. if it has lots of money in the bank.
But those days, when you have (still) have to compete with hedge fund managers who can (could) generate gobs of money doing nothing, a real company doing some real work doesn't look serious.
Hopefully this will change as a result of the current financial crisis, but I'm afraid the right lessons aren't being learned when you see the Big 3 CEOs being lampooned for not taking a bus when they were asking for 20 billions, while nobody asked the bank CEOs how many dozens of millions they spent on blow, hookers and cocaine in the past months, and the fuckers got several hundred billions, for doing nothing but fuck the whole economy up.
Re:Why layoff? (Score:4, Interesting)
I once heard a lecture by a researcher in the field of computer supported cooperative work. He mentioned that one of his largest consulting clients was an insurance company where new management noticed a layer of bureaucracy with no identifiable output. So rather than figure out that output might be, they simply fired them all.
It turned out that what the people in that layer did was to coordinate the flow of information through the company. They didn't approve a policy or claim, or study some aspect of those things. Their job was to know the state of these things, and what needed to be done next under various special circumstances.
MSFT is a public company (Score:3, Interesting)
They definitely don't need to fire anyone to get past an economic slump.
They don't HAVE to but they probably NEED to. Management NEEDS to meet the demands of the board of directors, and ultimately shareholders. That is the trade-off of being a public company--you get liquidity, access to capital and so forth but you have that little obligation there to those who have invested. MSFT has promised in its quarterly reports etc. to meet a certain level of fiscal performance, and though it could certainly survive without layoffs it probably would fall far short of that performance level if it didn't trim some fat.
If they had a surplus of good people, the best thing for them to do is put them all on projects with a 3-7 year horizon
If only the market was that far sighted, but it isn't. The market can't seem to see past the next fiscal year (nor does it seem to look back that far either). Multiple consecutive quarters of un-profitability (or even merely declining profits, if the market conditions were better) would decimate MSFT's market cap.
Then, you have to look at MSFT's track record with projects that far out. Vista certainly didn't live up to the original vision. When it was "longhorn" and promised technology got dropped left and right (WinFS et al) it was suggested that they'd finally appear in the next release after...and with Win7 there is nothing about them at all. At least there are no false promises but with Win7 shaping up to be little more than "Vista SE" it appears innovation is slowing to a crawl, at least in terms of deliverable products.
With the short-sighted mindset of investors in the stock market, and MSFT's track record of "innovation" lately, I don't think many would have confidence in MSFT if they took "surplus talent" and directed it at nebulous projects with no revenue-generating prospects for several years.
I worked for Neutron Jack Welch (Score:5, Interesting)
I worked for GE during the days of Neutron Jack Welch. The company culture was fear and intimidation. My immediate manager cried in the office at least one a week. I attended meetings where the secret agenda was that the meeting would continue until somebody cried. In management training, I was directed to march in the hallways chanting slogans to the effect that "no one is irreplaceable." I was yelled at by people who didn't even know my name. I saw people spit on each other. Two people were killed in separate suspicious fork lift accidents.
Welch told his general managers that if they did not produce returns that exceeded the market average, the first thing to happen would be the dismissal of the manager and then the business unit would be sold. The business units then ended all R&D and cut overhead to the bone by eliminating every conceivable soft benefit including the water fountains, toilet paper, and bathroom cleaning. The businesses cannibalized themselves for short term profit while the managers waited out the clock for early retirement or a new job. The successors would just have to deal with the low moral, lack of investment, and empty husk of a business left behind.
Welch was great for share holder, but he was very bad for employees. It's debatable, but he may have been very bad for GE in the long term.
Re:You mean (Score:3, Interesting)
IIRC, Microsoft has never had a major layoff in the past. That's why it would be a big deal, if it's true.