Microsoft Rumored To Lay Off Thousands Worldwide

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."

Comments

Why?

[ShooterNeo]

I have to ask...why? I thought Microsoft was massively profitable, even today. Surely they don't have to fire all these people to prevent losses?

If Microsoft is still profitable, despite the recession, then they are really using the economy as a 'cover' to do the layoffs they always wanted, anyways. A good chunk of Microsoft represents divisions that don't make money, and never have. They have all sorts of niche applications, research, online sites, game consoles, ect...none of which, as far as I know, have made them any money. All of Microsoft's dough comes from Windows and Office.

(before you say the Xbox division has made money, check your numbers : it never has made anywhere close to the money that was invested into it for each console. And, once a console is obsoleted, if you haven't made the money you spent to develop it back, you never will)

Re:Why?

[Jeff Hornby]

If you look at the blogs of some of the microsoft employees, Microsoft isn't just using the recession to cut unprofitable product lines, they're also using it to cut people who maybe shouldn't have been hired in the first place. 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.

Re:Why?

[ShooterNeo]

Of course, that's a really douchebag move on Microsoft's part. If they are going to fire a ton of people to increase their profits, why didn't they do this when the economy was ok? Or wait until the recession ends? Essentially they are kicking out thousands of people during the WORST possible time to be fired, and doing this now in order to not look as bad and to prevent lawsuits. (since the best way to do a questionable firing is to lump it together with a bunch of other firings and call it a 'layoff')

I know, I know, Corporations are not your friend, even if they employ you. They are out for themselves, and noone else. But why would an employee of Microsoft be motivated to 'go the extra mile' for a company that does things like this? If a company I was working for did stuff like this, I would quickly lose any loyalty I had and try to find ways to manipulate the system in order to do the least work for the most pay.

Re:Why?

[Hurricane78]

You still live in the illusionary world, where companies care for anything other than more money? Why do you think, they call them "human resources"? Because you don't work with resources. You use them. And when you used them up, you throw away the empty shells.

They don't even need to attempt to cover anything. It's just you, thinking they had some kind of conscience.

If Microsoft does anything at all, it is, to make more money. There are no second objectives.

And this is not a MS-specific thing. It's the foundation of all capitalism and all companies.
This is why some people hate capitalism. I don't hate. I just think that there is no better alternative yet.

Re:Why?

[Thelasko]

I have to ask...why? I thought Microsoft was massively profitable, even today. Surely they don't have to fire all these people to prevent losses?

You have a lot to learn about how Wall Street works. Being profitable is not enough to keep stock prices high. Brokers and analysts come up with figures (sorry for the ads) that corporations have to meet or exceed for fear of a massive sell-off. As a result, corporate executives often order massive layoffs in order to meet these expectations made by Wall Street to keep the value of their stocks high.

In my opinion, this is a major flaw in the way our economy operates as these layoffs ultimately do more harm than good. Corporations that do these types of layoffs often hire many new employees as soon as it looks like they will beat The Street's expectations and will spend massive resources to train them, only to get rid of them down the line. Employee's are all unique and should be treated as an investment, not a commodity.

Re:Why?

[gbjbaanb]

Rather, if MS is like any place I've ever worked, he was probably referring to the people who shouldn't be in the position that they are in.

unfortunately those are the people who will be deciding who goes.

Re:Why?

[quarterbuck]

Cutting "low performers" has, in my experience, always been a sign of a company in financial trouble.
Jack Welch was the one of the first guys to propose the idea of firing the weak performers and at GE popularized it company wide, firing employees and selling weak businesses. I have not worked at GE, but from reading his book it seems that it is important to measure the right outcome before firing people. When he said that he would sell off companies which were not number one in their industry, the companies started redefining the industry very narrowly so as to be number one. eg: We are the number one company that makes 40W bulbs and toothpastes. He also explains how you can end up firing wrong employees.
So Firing bad employees has been done atleast by one company in times when they were not in financial trouble.

Why layoff?

[gillbates]

culling the bottom 10 or 20% of performers in order to improve the overall performance of the company.

If someone isn't doing a satisfactory job, they can be fired.

But no matter how many people you lay off, you'll always have someone in the lower 10 to 20 percentile. That's just the way statistics works.

There are a variety of reasons why culling the bottom performers seldom improves the performance of the company as a whole:

• Employees typically retain undocumented product knowledge in their heads. Someone with intimate knowledge of the codebase, who wrote the original code and debugged it, can typically turn defects around ten times faster than someone who was not involved in the original product.
• Engineers with the lowest rated performance usually get that rating because they are thorough, methodical and diligent. In other words, they keep the poor code the other engineers write from making it into the shipping version. These are not the kind of people you want to fire.
• The best performers typically sacrifice aspects of the job which aren't rated in order to achieve that rating. For example, they might write unmaintainable or difficult-to-understand code; may reinvent the wheel; might write code which is far more complicated than needed. While they meet their rated goals, their long term costs may exceed the benefit.
• Problems inevitably crop up that require novel solutions. Having a staff with a diversity of skill sets creates an environment where the best tool is used for the job, rather than having to use a single tool for every job, no matter how poorly suited, because the company laid off all employees with "unneeded" skill sets.
• There will always be employees in the lower X% no matter how many people are laid off. Typically, there is a 10 to 1 performance ratio between the best and the worst performers. Instead of simply laying off the lowest performing employees, the question should be, "Why such a large discrepancy?" The answers are often illuminating: A.) Office politics; B.) Personality conflicts; C.) Equipment/resource shortages; D.) Problems with the development process; etc... Ignoring the reasons and simply laying off employees often exacerbates the underlying problem.

I've seen management buy into the "layoff the lowest performers" myth far too often to let it go. It is almost always the harbinger of deeper, structural problems within the company, which if left unaddressed, result in the financial collapse of the company. Laying off people - even the worst performers - almost never results in a more efficient company. If you can't fire them for cause, they're more than likely adding value, even if that value isn't being measured by a performance metric. Take that away, and you take away your ability to do business.