Slashdot Mirror
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."
Microsoft saw that 10% of their employees were hanging around on /. all day hoping for a first post.
What's a shame? 15,000 Microsoft employees losing their jobs.
What's a crying shame? 75,000 continuing to work for Microsoft.
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)
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.
Viable Slashdot alternatives: https://pipedot.org/ and http://soylentnews.org/
A CNBC report out today appears to put to rest continued rumors of significant Microsoft layoffs coming this month.
In recent weeks, two blogs -- Mini-Microsoft and Fudzilla -- have both reported that Microsoft is preparing to lay off large numbers of employees before the company announces its second quarter earnings on Jan. 22.
Neither blogger quoted inside sources and both later backtracked on their reports.
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).
Don't worry! the cuts are just "trimming the fat" on Microsoft, to make it a more "lean" company.
Cuts are expected to be in the following "unncecessary" departments:
- VISTA Marketing
- Quality Assurance
- Software Testing
- Maintenance Programming
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.
"There can be little doubt that union activities lead to continuous and progressive inflation." F. A. Hayek
Microsoft is still massively profitable. This downsizing will only make them more profitable. Microsoft may not be the #1 player in 20 or even 10 years, but this event has little to do with that.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
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.
It makes one wonder if they'll ask congress for a bailout to save all those jobs...
Probably because, for Microsoft, this doesn't happen all the time. I can't remember the last time Microsoft laid off 15, 10, or even 5 percent of their workforce.
Here's the Dirty Secret: Around the nation there are profitable companies who have been operating "fat" for years, with bloated rosters of do-nothing personnel. You know this -- We all know this, we've bitched and moaned about it on this board and down at the local pub for years. The trouble was, it was just too difficult to fire anybody. In the litigation-happy workplace that was late 20th century America, a guy had to practically set fire to his cubicle with two secretaries tied to chairs inside it before he could be let go.
No More.
Now, all any large company has to do is mumble something about "recession" or "difficult times" and nobody -- employee, manager, or labor lawyer -- will blink twice.
that they are acting like other companies?
I prefer the "u" in honour as it seems to be missing these days.
So what are these people going to do? And how are they going to get jobs. Right away the market will be saturated and they will be sitting around.
Short term, work on free and open source software (FOSS) from home for free. This keeps their hands warm and gets their skills up to the new market.
Long term get employed to implement FOSS solutions for companies looking to avoid Microsoft costs.
Well that is what I see the better ones doing.
When lots of people job-hop in a good economy, companies will intentionally overhire to compensate. In recent months moany companies have eliminated this cushion in "modest" (single digit percentage) layoffs. Serious layoffs may be around the corner.
Smart enough to know that if they want to eat, they have to work.
Following your logic far enough reveals that we're all guilty of murder.
If you were half as clever as you think you are, you'd be able to rationally sort reality from your own hatred of Microsoft. BTW, this is coming from the president of a Linux User Group.
Take a step back, get some perspective, and stop allowing yourself to be so emotionally involved with technology. It's fine to be passionate about a technology... up until the point where it replaces rational thought. After you cross that point, you lose respect, geek cred., and any chance to be taken seriously. There are plenty of brilliant people who will never impact the world because they lost all creditability. Don't be one of them.
If I mod you up, it doesn't necessarily mean I agree with what you've said, sorry.
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:
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.
The society for a thought-free internet welcomes you.
Microsoft is the General Motors of software. I've been saying this for years, and slowly Microsoft is proving me right.
Here are the similarities:
1. Low-quality products. Quarter after quarter, year after year, cranking out low-quality products that have persistent design issues.
2. Lots of overhead for a few products that do produce profits.
3. Ignoring the customer. How many times have calls for better/more secure products gone unheeded?
4. Incompetent management that has no vision.
Microsoft's long term health will end up like GMs - they have a mountain of cash, so it will take a while, but unless the above changes, Microsoft's fate will be the same as GM's.
-ted
Microsoft makes money on their OS and Office, everything else is break-even or a loss. Vista adoption rates by businesses have been dismal before the recession hit. They'll be a lot worse now. Microsoft is clearly expecting a bit earnings hit.
[Insert pithy quote here]
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
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Rumor has it they are planning on doing this every month until everyone is in the top 50%.
I hope this guy doesn't write code.
-- Posted from my parent's basement
And shilled it. Glad to see 2009 hasn't taken the utter inanity out of Twitter...
He gets to vote.
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.
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 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.