Slashdot Mirror
Layoffs at Microsoft, Intel, and IBM
Normally I try to avoid posting straight business news, but I think that these 3 stories combine to something meaningful.
Muleguy noted Microsoft is laying off 5,000,
Mspangler reports that
Intel is cutting 5-6k, while
nonyabidness afraid4myjob submitted that IBM Layoffs have begun with no number, but estimates as high as 16,000.
Fuck. Thank you world economy.
So yesterday, IBM posted great profits that beat wall street estimates. And today they're doing layoffs? That makes no financial sense to me. Why should any company lay off people just because "Everyone else is doing it"?
-- Political fascism requires a Fuhrer.
There's 5,000 new empty chairs to fling around in Redmond!
"Skill shows through where genius wears thin." -Wittgenstein || Religion: uniting aviation and architecture.
Microsoft are cutting up to 5,000 from a total of 90,000 employees - 5.5% of its workforce.
IBM might cut 16,000 from a workforce of 387,000, a cut of 4%.
Intel are cutting up to 6,000 from a workforce of 84,000 - 7% of jobs.
SKID ROW, Redmond, Friday - Microsoft Corporation has enacted swingeing layoffs in mid-January after the failure of its stock buyback program, and has called for a government bailout in the face of the credit crunch.
"Vastly popular operating systems like Vista just aren't selling," said marketing marketer emeritus Bill Gates, "and it's all because people aren't confident to spend their money. In fact, they didn't start buying it in 2007 because they were expecting this even then. A subsidy to buy good, honest American computer operating systems is essential to the health of the economy, or my part of it."
Should the Big One of American virtual office supplies fail, economists predict that it could free up millions of dollars in business spending and provide a devastating boost to an economy reeling from the impact of the credit crunch.
Hiring in most Microsoft divisions has frozen in the last six months and 30GB Zunes are already on suicide watch. "The workload's impossible to keep up with," said blog technical evangelist Gary M. Stewart. "I've even been answering Slashdot comments on Boycott Novell or Groklaw. It's impossible to keep track of! Anyway, you're just another Twitter sockpuppet. Or Mini-Microsoft. Admit it."
Additional bailouts have been hooked on the bill as riders for HD-DVD, eight-track cartridges, 78rpm gramophones and Babbage analytical engine gear manufacturers.
Senators have stated they will only bail the company out with a change in top management. "What the shit," said Linus Torvalds as his draft notice arrived.
http://rocknerd.co.uk
This equates to some 5% of the workforce, including 58 of 2900 in the UK. This financials filing wasn't due til 5.30 EST, so they must have been pretty jump about it.
Economists like to pretend that they're dealing with a hard science but they are wrong, so very wrong. Economics is certainly a complex field of study but it is also one of the squishiest sciences there is. Economics is psychology with graphs and math. You can talk about supply and demand, this curve and that, but we're ultimately talking about human psychology. You can't use normal logic to figure this stuff out, you have to work with crowd dynamics, herd instinct, quit talking about how people should behave and pay attention to how they really behave.
If you want to understand how everything is going pear-shaped, just look at the Great White club fire. Huge crowd, small venue, and the band's pyrotechnics set the place on fire. Rationally speaking, there's no reason why anyone had to die. There were sufficient doors and sufficient time for a calm and orderly evacuation. And our economists are the ones who would look at that situation and not quite grasp why there was a panic, a human log-jam at the door, and a whole lot of dead bodies. "That wasn't rational behavior! That was irrational exuberance, or maybe irrational shit-the-bed terror. The problem here is that my observations of this event do not fit my models."
That's what we're seeing in this economy, a fire in a club. Everyone is working to maximize their own survival even though it will harm the chances for the group as a whole. Companies are shedding jobs everywhere, getting work is damned near impossible, and we've got a negative feedback loop that nobody seems to be able to break. And nobody wants to take a look at the wall where the writing stands hundreds of feet high -- "we need to reform the way we're doing business and this will change our entire economy as we've come to know it." The thought is too frightening.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
If only end-users are given the same power regarding software "features" they don't need and don't care for (just lay them off). You can do that fairly easily with Linux and BSD, but trying to carve up Windows is asking for pain.
This is a normal management decision. When you have prospects of declining growth, cutting 5 to 10% of your under-performers is just good management.
Rationality aside, my sympathies for the families of those being laid off (although in the USA job market this is not such a big deal).
Here is a link to the entire memo Steve sent to employees regarding the layoffs.
No, it's not my blog nor am I affiliated in any way with the site.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
http://www.itjungle.com/bns/bns012109-story01.html
Somehow this is all going to be linked to the new Prez, right?
Oh.. Don't worry they can still blame Bush for another 18months...
FDR blamed Hoover for about a decade.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I think it's time for US companies to abandon those oversea cheap labor idea's and bring back those low paying jobs back into the US. I know the whole Global economy is a mess, but I'm a firm believer of "Charity Starts in the Home". There are so many people right now that would take those jobs. There was what, 4000 people interviewing for 150 jobs at Wal-Mart?? Times are going to get tougher and we need to reel that shit in.
It's left blank because I have nothing to say to you punks!
Once upon a time, a company had loyalty to it's people, and the worker's were expected to have some loyalty to the company. If the company had a rough quarter or a poor year, people pulled together and worked harder. A company USED to do layoffs to avoid going bankrupt. Workers viewed each other as extended family members - it was common for workers to get together at each other's homes on weekends and holidays. Families got to know each other, work was done in a 'team' enviroment; and if you pulled your weight and did your job - you could expect to retire with the company you worked for. 20 years of service was celebrated, opportunties for promotion were biased such that someone who had shown loyalty to the company had first dibs, over someone coming in from the outside.
Today, despite record profits, companies close plants and terminate people - so the few executives can reap huge bonus's. Getting laid off by a plant closing, business downturn, or poor managment decisions punishes employees who were powerless to avoid the mistake - but end up taking full responsibility in that they have to sell their homes, and re-locate to find work elsewhere. With the cost of housing - this means that the 401K money must be robbed today, so they can continue to make mortgage payments while they try to sell their home, and have money to bring to closing when their home sells for less than what they paid for it.
I've been there, I've had my retirment almost depleted because companies transferred jobs to India, a plant closing, terminating a project I was involved with, a company purchased and moved overseas, and a company that failed due to poor managment. Now after 20 years, I finally have solid career.
When did all this change? Why did this change? It certainly hasn't been for the better - for the USA used to lead the world in production, in technology and development. People used to matter, now each of us is just a cog in the company machine. We are all expendable, and will be dropped on a whim. I wonder why.
In anticipation of the Vista jokes, the following excerpt from an article on the subject may help shed some light on the matter:
I think a fair translation of the above would be that the economy is in the toilet no one knows if Vista will sell. Err ... Windows 7.
On the other hand, with people being put out of work, it's a lot less fun to bash Microsoft.
History still blames Hoover.
My blog
To be fair, it was Hoover's fault. Not that he could know; most of the techniques we use today to try and mitigate the effects of a long term downturn weren't even invented during Hoover's administration. It wasn't (at that time) recognized that unregulated capitalism was perfectly capable of committing suicide.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Actually, the answer for IBM is "offshore contracting". Waaaay cheaper. Spoken from experience. More and more of my coworkers are in another timezone. They're in India, the Philippines, South America, et. Al. We've been training up these contractors are some of the systems. Hopefully, lucky for me, the Big Systems with Major Impact are not being segued over.
I'm posting as AC for obvious reasons, I think.
I know somebody who works at IBM. They work on a project that supports HR department's requirements when they are doing big layoffs.
In a kafkaesque sort of way, they have job security just so long as things suck and there are additional layoffs coming down the pipeline.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
Really, it was the Federal Reserve's fault. Trying to fight inflation in a recession is stupid. But that was long before Milton Friedman's monetarism.
Of course, Hoover's protectionist policies didn't help. Hopefully Obama listens to his well chosen economic advisers and doesn't follow the same path.
If you had super powers, would you use them for good, or for awesome?
I heard that companies such as Microsoft are using this time to dump their bottom 5-10%, rather than dumping their bottom 5-10% because of the economy - although I am not sure of the validity of that reasoning.
To be fair, it was Hoover's fault.
Hoover screwed up, but Roosevelt continued and compounded Hoover's mistakes. It's quite interesting to dig up Roosevelt's speeches from the campaign against Hoover, where he correctly lambasted Hoover for all the things that he later referred to as the "new deal" and promoted.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Go to the Microsoft Careers home page and search for job openings - there are six new openings for TODAY alone - 853 openings altogether. Wonder how many of those will eventually be closed?
Previous economic discussions on Slashdot have included several posts with the sentiment: "I'm choosing to ignore this recession. I still have a job so I'm going to continue as before. The only economic problem we have is psychological."
Are you still so certain that your job will remain when another 5% of your customers are about to become unemployed? Are you still so optimistic that you could easily find a new job with a million other educated and experienced workers back on the job hunt too?
Even if this recession were purely psychological, it has set a wave in motion that will splash around for a while causing layoffs and bankruptcies. If there is a rational basis for the economic shrinkage then it could be even worse. I wonder how long it will take to return to growth and optimism.
Did anyone else catch this? They are cutting marketing expenses. The only division that actually does something useful within the company.
That's because Hoover sucks
go back to england, no one in america spells the word "cos"
That's what's good about capitalism.
It doesn't really ever commit suicide because it's not a person.
Circuit City closed so now there are 35K jobs lost! Why is less than 1% percent workforce layoff from MS a big deal?
It all starts at 0
Offtopic: Is there a reason why when I was reading this story in my igoogle page that an ad for Al Jazeera showed up in the reader window? Since when has slashdot starting accepting ads from terrorist supporting organizations.
Remember what that was deemed appropriate must have office equipment for the hip IT company?
Why don't they sell some of that crap?
If Ballmer and Gates chipped in half a billion each, that would pay 1000 employees a hundred grand for a year.
I am very small, utmostly microscopic.
International Business Machines Corp. said Thursday it plans to open a technology service delivery center in Dubuque, Iowa, creating 1,300 jobs in the northeast part of the state.
http://www.startribune.com/science/37635999.html?elr=KArks:DCiUo3PD:3D_V_qD3L:c7cQKUiacyKUnciaec8O7EyUr
Cheaper digs and salaries (average salary ~ $45K), and Iowa and locals are giving around $50-80 million in cash and prizes to get them.
http://www.desmoinesregister.com/article/20090115/BUSINESS/90115020/-1/BUSINESS04
All 3 are hiring out of the states and EU. It is called this is a mass move of jobs out of the states.
I prefer the "u" in honour as it seems to be missing these days.
Yes, you're not confused, it is crazy that companies with raving profits are dumping employees, and it is heartless.
What defines the beginning of the end of the 20th century and the beginning of the 21st is wild speculation on everything. They wildly speculated on the tech bubble, housing, oil prices, and credit.
Now, they're overspeculating (overreacting) yet again, this time on a potentially sour 2009. However, it is only going to be a sad 2009 because of how they're acting.
Knee jerk reactions got us into this mess, it is like quicksand to keep speculating like a madhatter and freaking out over everything.
Welcome to the Great Depression part deux, caused yet again by your own panic. The first long & great depressions was caused by overspeculation in the railround companies, gold, and 48% tariffs on all imports (an example of governments freaking out). All of which led to the same self-bleeding that is happening now.
History repeats itself, and you're still all morons this time around even with all your technology and ingenuity. You can't even help yourself, why help anyone else.
Stabbing Westward - Save yourself
You cannot save me, You can't even save yourself.
I cannot save you...I can't even save myself.
Save yourself, So just save yourself.
15% layoff - or in that figure. We've known about it for months, coming, too. Today is the "notification day" for many Sun employees, too ;(
And here I am looking for a job at IBM, Intel, Sun, . . . . Maybe I should take the in-laws up on their offer to let their son-in-law with a CS PhD live in the basement for a few years.
I don't think America needs more low-paying, dead-end jobs
Right. What America really needs is more high-paying executive positions. Lots of them. An executive position for every family. If everyone in America could pull THAT kind of income, boy our economy would really get moving then!
Uhh, if the government pays a salary of $100,000 and then collects $30,000 in taxes, you can't say that not paying the salary is a loss of $30,000 in taxes. It's a gain of $70,000 via not paying the salary to begin with.
You're not creating wealth by taking the $100,000 from other people as taxes and then giving it to the worker. Claiming his spending represents a positive economic activity is kind of silly, since the money was already taken from other people.
Repeat after me: government does not create wealth. Even if it makes some men wealthy.
Government can only create wealth if it gets into the business of making & selling something, which is generally a bad idea for all kinds of reasons, e.g., socialism doesn't work.
You, sir, are completely delusional. The Academic Economists are as full of BS as the armchair ones.
So where were these superior Economists last year, and why did they completely miss calling the biggest Economic event that they will ever see in their lifetimes? And why are they getting wrong the current crisis?
The only ones who called it were viewed as loons, or fringe wackos. Everyone else got it completely wrong (though many have backpeddled, and are trying to claim that they saw it all along).
There's a reason why the "Nobel prize" in Economics is called a fake Nobel. And your voodoo Academic Economists are a significant part of the problem, who simply don't understand what is going on. Few do. You might start paying attention to those few who got it right. Here's a clue - it's not the majority in Academia.
Zorg is behind this...
flinging poop since 1969
Heard from staff that Sun will be announcing another RIF this week too...
"It's a doughnut stuffed with M&M's. That way when you finish the doughnut, you don't have to eat any M&M's."
Apple is STILL expanding sales of it's main products: ipod, iphones and computers even in the worst financial quarter in the last decade or so. Astounding. Is it marketing? Is it his Jobs-ness? Is it mostly good, well researched products? Is it all of the above? Probably the latter.
Regardless, I wish those laid off at any company good luck in finding a new position. It's a sorry thing since this crisis was probably avoidable by people less blinded by ideology, but then again, most everyone was blinded by the magic of the market so maybe it wasn't.
Gentlemen! You can't fight in here, this is the war room!
There are about 3.5 million in IT, according to the BLS.
There are over 1 Million cheap workers here on the H1/L1 Visa program. That's quite a sizeable percentage of the total U.S. employment. And it's FAR greater than the total number of unemployed IT workers.
The basic fact is that if you want to eliminate or seriously reduce unemployment in the IT sector in the U.S., all you have to do is to eliminate all of the H1/L1 visas.
This would have the added benefit of opening up jobs to those in other fields (like the automotive industry). Yes, there would have to be some retraining. But we have such programs around, and they are a lot better than the fake educational systems (I.e. diploma mills) overseas.
It's time to eliminate the guest worker programs, and send the H1/L1s back home.
The best way to predict the future is to create it. - Peter Drucker.
This is the word that has been escaping you.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
Reganomics is dead, pass it on.
If you think there is exactly one problem that caused this whole mess, you are wrong. Like any good engineering failure, this was caused by multiple little failures all concatenated to create a nice big one.
Microsoft has been hoarding cash instead of reinvesting it. http://finance.yahoo.com/q/ks?s=MSFT
I think it is time to regulate market capitalization (not more than 2 times quarterly revenue) of all listed companies.
I believe it will enhance entrepreneurship in America.
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
...unregulated capitalism was perfectly capable of committing suicide.
Care to cite an example? Pretty much every single economic collapse of the past was -caused- by a centralized control or manipulation of some sort; not free market capitalism.
"If anything can go wrong, it will." - Murphy
Yes, it's abused to hell and back because it is a literary device rather than a functional metaphor, especially when applied to systems of things.
Well, capitalism is a bitch. It is a theory designed on a time very different from ours (industrialized society, not modern one).
At that time, it was a lot more difficult to take the jobs on another continent and just ship all the goods here. At that time it wasn't as easy for companies to just transfer all their money to foreign tax havens.
Because let's face it, every government needs to collect some taxes to keep some services running unless you are fine with the police force, fire fighters, the military, etc. being completely privatized with no government interfering in their policies.
And any government with lower living conditions and less services is more likely to keep taxes lower and have the wealthy companies to keep their money there even if their services are somewhere else entirely. This causes the government to tax more on the remaining ones to find money to keep the important public services running.
In short, capitalism was never designed to work in conditions where the society had massive differences in living conditions. It wasn't a problem when the society was always a single country but now that it is the world...
It could be fixed by giving it enough time. Theoretically it all evens out eventually. But is that a century? Two? Who knows. Alternatively, it could be fixed (from our POV) by people caring enough of all this that they would prefer strongly enough to buy from companies manufcaturing stuff locally and keeping their money in the country that the companies would benegit from doing that. And that's never going to happen.
If this was tl;dr, I'll summarize it here. Come, join the left alliance. We have a lot of fun and the ideological leftist women tend to be damn pretty, too.
(The advice might not be applicable in certain countries with two party systems of government. Hell, some of our right wing parties are further left than the democrats.)
IBM is forcing certain job classes (Sysadmin being one of them) to relocate to one of several GDF sites. Boulder in my case. Moving from Ohio working at home to being back in a cube.
Basically they said you have 6 weeks to let us know in writing if you will move to Boulder and then report on week 7. If you do not we will consider you voluntarily resigned.
This is another way to lay off even more people because I'm sure they're expecting 40-60% of people to say no thank you.
That's because Hoover sucks
...Is that good or bad?
For those that don't get it --The OP is happy about Microsoft laying off for more or less the first time in its 30 year history (other than due to acquiring other companies).
Woo hoo, indeed!
Today we announced second quarter revenue of $16.6 billion. This number is an increase of just 2 percent compared with the second quarter of last year
These are the parts that always get me. We're not losing money, in fact we're making more profit than last year. However, because we wanted/expected to make even MORE money than that, we're going to have to fire a bunch of people
Whether or not the firings are reasonable, it seems to me that in all industries I'm hearing about a lack of profit *increase*. Companies like the music/movie industry continually bemoan that the profits they're making didn't go up as much as they hoped. Again, not that they're not making *shitloads* of cash hand over fit, but they're not making shitloads of cash at an exponential rate over the previous year/term/etc...
Certainly, he could have. The protectionist measures that were being debated before the crash of 1929, whose very prospects of passing contributed to the crash, and whose implementation after the crash almost certainly at least deepened the ensuing recession reflected an approach that had been recognized as counterproductive for a long time before Hoover.
Hoover can certainly be blamed (not exclusively mind you, lots of other people, particularly in the Congress of the time, share blame) for the policy decisions that produced the downturn, and that made it a long-term, harsh one.
Lack of regulation played some role in the collapse (a bigger role in the ineffectual response), but more important in the collapse were particular government actions like Smoot-Hawley, which was very much not "unregulated capitalism", and was widely recognized by economists and even some leading financiers and industrialists as being disastrous when it was proposed.
And they will not be filled either. Companies that like to beat the 'We cannot find enough qualified candidates, we need higher H1-B visa quotas' drum will always having openings listed. You can bet that most jobs listed that represent a true need already have a preferred candidate identified and are listed mainly to satisfy Equal Opportunity Employer requirements.
Bwaaa? Capitalism is by definition ruled by a boom/bust cycle. If the bust is bad enough, it can take decades to recover, which is indeed what happened in the great depression.
I'll agree that actions taken by Hoover made things worse, which takes some of the blame off of pure capitalism, but the bust itself was just another cyclical event, which, fed by a semi-natural disaster and an excess of greed, ended up being substantially worse than normal.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Well I can't say that I didn't see this coming since during an interview at IBM in Poland I was told by the head of a department that they will be recruiting at least a 100 new employees this year just in the Krakow office.
Already the currency makes a difference and adding the fact that IBM is known to be very cheap in pay here makes a great savings plan..
Well it's not going to be the boss's lunch buddies. Probably one of those annoying asocial guys who claims to do work.
You got me into this! You were the ideologue! I'm only a poor assassin! - Twenty evocations, Bruce Sterling
And now, my little tune. Sung to the familiar tune in the Wizard of Oz:
Ding, Dong, the Bush is gone;
Which old Bush? The stupid one.
Ding, Dong, the clueless Bush is gone!
Yes, trollish. But I'm allowed to have some joy now and again, right?
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
I fully agree that layoffs should be treated as a last resort to save a company from going under.
*If* you're going to do layoffs, though, do them all at once, like ripping a band-aid off a hairy arm.
From the article:
> Microsoft Corp. announced it will slash up to 5,000 jobs over the next 18 months, 1,400 of them immediately.
Now, if you're working at Microsoft right now, where is your morale? Unless you're one of the people deciding who gets laid off, it has to be hovering right around zero. If I knew I could become one of those 3,600 "dead men walking," the first thing I would do would be to put my resume on monster.com.
My guitar chord generator.
Of course they're going to lay people off, H-1B visa hiring is just around the corner! I just wonder if: 1) They kept H-1B visa workers while firing Americans. 2) They're going to get away with hiring more H-1B visa workers in April, when more H-1B visas are handed out.
For some companies the hiring process is a form of masturbation. Rejecting a high percentage of people makes them feel like they select only the best, which implies that they are the best too.
When I was hiring we spent only about an hour with each candidate and hired people who worked out fine.
The fun thing about economics is that it's so mind-bogglingly complex that you can blame pretty much any economic event on anything you want. So, if you're a big free market proponent, you can say every collapse to date has been caused by regulation, and find some evidence to back you up. Similarly, if you're a proponent of regulation, you can say every collapse to date has been caused by a LACK of regulation, and also find some evidence to back you up.
Your money comes from debt which pays interest and therefore requires continual exponential growth to function. It's a pyramid scheme. For which you can thank the bankers.
Have a look at the back of a dollar bill sometime.
Deleted
There aren't any! Linux is as strong as ever. Long live COMMUNI... er, I mean Linux!
Balmer has said he would like to release Win 7 this year. I bet the MS layoffs will hurt morale and Win 7 will be delayed until next year. If not, it will be released this year premature, like the turd Vista was.
Remember, if this premonition comes true, you read it here first!
- Profit Bob
Harbinger of the Truth
Well then...
Every collapse to date has been caused by a LACK of regulation!
Aside from the fact that the US has never had unregulated capitalism, you're right.
There are pretty much no free markets anywhere, except for places like Somalia, where the government is too weak to interfere with the economy. Citing the US economy as an example of free market economics is capital ignorance.
Care to cite an example? Pretty much every single economic collapse of the past was -caused- by a centralized control or manipulation of some sort; not free market capitalism.
how about the this very economic crisis
MS terminating 5,000 employees is akin to skin cells flaking off Bill Gates ass. They have so many employees world-wide that 5,000 will be almost unnoticeable. Doesn't mean those people that are loosing their jobs aren't harmed, but for Microsoft 5,000 is nothing.
They can let that many go by terminating temporary staff.
You can lead a man with reason but you can't make him think.
Intel, Microsoft and IBM CEO's give themselves a big well deserved bonus.
That's what happened with Ford, the year the company lost billions of dollars, the CEO gave himself a $35 million bonus on top of his already huge salary and other perks/compensations.
I know for a fact that several departments within IBM (in the US) have sent down employees to Brazil and India to train those who wouldd eventually take over their jobs.
So in the strictest sense, yes, it is a resource action to fire "duplicate" services or make the company run leaner. However, it is disengenious to say anything other than this was planned to occur as early as Q1 2008. Simply put, IBM artifically inflated their employee base so that they could transition services to a less costly (to the bean counters) and fire the ones in the US.
They will "get away with it" only so long as the company sees no penalty in their actions. They didn't fire anyone until after Christmas and after their quarterly earnings. So to many investors they are doing good things.
The only way to combat offshoring is: a) as a US customer, demand goods and services that originate in the US; b) US gov't remove any tax benefits to a company that has X percentage of the workforce in other countries. It doesn't penalize a company (ala tarrifs) but does reward companies that are American in employee base with tax incentives.
Won't convince him. He'll cite Fannie and Freddie if he's a conservative wingnut, or the existence of the Fed if he's a libertard.
Capitalism is by definition ruled by a boom/bust cycle
Capitalism. Noun. An economic system ruled by boom and bust cycles.
Well, not exactly. Not even Wiktionary has that definition. Most people argue that the boom/bust cycle is a result of centralized monetary policy. I'd dig out some articles if I were at home and not on my lunch break.
the bust is bad enough, it can take decades to recover, which is indeed what happened in the great depression.
Depression wasn't just "cyclical downturn crits you for 10." There was another credit crunch during the roaring '20s - people bought everything on credit. Why save up for a radio when you could rent it now for so many dollars a month? Why buy stock outright when you can put 10% down and your broker will give you the rest?
People spent the entirety of their paychecks on what amounts to debt maintenance. A little bump in the great, winding road of economics and suddenly you're wondering if the other 90% will ever appear. Eerily similar to the subprime mortgages today.
DATABASE WOW WOW
IBM isn't cutting fat, either. The people I know who have gotten axed were the kind of people that companies fight to acquire and fight to retain. Meanwhile knuckleheads that play the corporate politics game well but produce little are safe.
It wasn't (at that time) recognized that unregulated capitalism was perfectly capable of committing suicide.
Well, students of Marxist criticism certainly recognized it.
Aside from the fact that the US has never had unregulated capitalism, you're right.
There are pretty much no free markets anywhere, except for places like Somalia, where the government is too weak to interfere with the economy. Citing the US economy as an example of free market economics is capital ignorance.
Yes things are great in Somalia lets model our economy after them.
Ding, Dong, the Bush is gone; Which old Bush? The stupid one.
You'll have to be more specific.
From: Steve Ballmer Sent: Thursday, January 22, 2009 6:07 AM Subject: Realigning Resources and Reducing Costs
In response to the realities of a deteriorating economy, we're taking important steps to realign Microsoft's business. I want to tell you about what we're doing and why.
Today we announced second quarter revenue of $16.6 billion. This number is an increase of just 2 percent compared with the second quarter of last year and it is approximately $900 million below our earlier expectations.
The fact that we are growing at all during the worst recession in two generations reflects our strong business fundamentals and is a testament to your hard work. Our products provide great value to our customers. Our financial position is solid. We have made long-term investments that continue to pay off.
But it is also clear that we are not immune to the effects of the economy. Consumers and businesses have reined in spending, which is affecting PC shipments and IT expenditures.
Our response to this environment must combine a commitment to long-term investments in innovation with prompt action to reduce our costs.
During the second quarter we started down the right path. As the economy deteriorated, we acted quickly. As a result, we reduced operating expenses during the quarter by $600 million. I appreciate the agility you have shown in enabling us to achieve this result.
Now we need to do more. We must make adjustments to ensure that our investments are tightly aligned with current and future revenue opportunities. The current environment requires that we continue to increase our efficiency.
As part of the process of adjustments, we will eliminate up to 5,000 positions in R&D, marketing, sales, finance, LCA, HR, and IT over the next 18 months, of which 1,400 will occur today. We'll also open new positions to support key investment areas during this same period of time. Our net headcount in these functions will decline by 2,000 to 3,000 over the next 18 months. In addition, our workforce in support, consulting, operations, billing, manufacturing, and data center operations will continue to change in direct response to customer needs.
Our leaders all have specific goals to manage costs prudently and thoughtfully. They have the flexibility to adjust the size of their teams so they are appropriately matched to revenue potential, to add headcount where they need to increase investments in order to ensure future success, and to drive efficiency.
To increase efficiency, we're taking a series of aggressive steps. We'll cut travel expenditures 20 percent and make significant reductions in spending on vendors and contingent staff. We've scaled back Puget Sound campus expansion and reduced marketing budgets. We'll also reduce costs by eliminating merit increases for FY10 that would have taken effect in September of this calendar year.
Each of these steps will be difficult. Our priority remains doing right by our customers and our employees. For employees who are directly affected, I know this will be a difficult time for you and I want to assure you that we will provide help and support during this transition. We have established an outplacement center in the Puget Sound region and we'll provide outplacement services in many other locations to help you find new jobs. Some of you may find jobs internally. For those who don't, we will also offer severance pay and other benefits.
The decision to eliminate jobs is a very difficult one. Our people are the foundation of everything we have achieved and we place the highest value on the commitment and hard work that you have dedicated to building this company. But we believe these job eliminations are crucial to our ability to adjust the company's cost structure so that we have the resources to drive future profitable growth. I encourage you to attend tomorrow's Town Hall at 9am PST in Cafe 34 or watch the Webcast.
While this is the most challenging economic climate
"During My Service In The United States Congress, I Took The Initiative In Creating The Internet." -Al Gore
Wishing doesn't make it so.
Near as I can tell, only difference between his assertion and yours was a pretty bare argument amounting to the idea that new private investment is good while new government investment does nothing but take away from that.
There are two big problems with that argument. The first and most obvious being that new private investment is highly limited right now by broken capital markets, and the conventional Friedmanesque tools the Monetarists and some neoclassicists have embraced aren't doing a darn thing, which is why people are even talking about Keynesian stimulus again.
The second problem is the idea that private investment is inherently better than public investment. I'd agree that for many cases market forces tend to correct bad investments more quickly than public policy mechanism. But there's nothing magical about private investment that dictates a person making the capital allocation decisions will automatically make wise growth-yielding choices while a person of similar abilities and education in a public role will make poor ones -- Scott Adams has made a career out of making this very point, sometimes with an economy of hyperbole that's startling.
So the real and big question here isn't public vs private, it's whether or not people making decisions about investments are making good ones that return the genuine value that underlies real economic growth. In short, if a government spends money it took from a valuable private enterprise badly, then yes, there's a net loss. If a government spends money it took from a private system that's barely investing in genuinely valuable enterprises at all on investments of even middling value, then it's a pretty different story.
If all of FDR's spending, regulating, and taxing brought us out of the depression,
The position of a lot of modern Keynesians (including Krugman, who's looking more and more right over a lot of stuff he took crap for 5-10 years ago) is more or less that the spending did indeed help. Some of the regulation and taxation (particularly certain 36/37 tax hikes) not so much.
then why did it last so much longer than any previous depression, when the government didn't have the power for that kind of intervention?
There are certainly a number of suggestible targets: a bigger and less localized collapse, climatic problems on top of economic problems, and some of the tax and trade policy decisions. Spending, not so much.
And which depressions are you arguing were markedly shorter? The "Long Depression" (http://en.wikipedia.org/wiki/Long_Depression ) has been measured from 6 to 24 years. The Panic of 1837 (http://en.wikipedia.org/wiki/Panic_of_1837 ) is measured at about 5 years. You can credibly argue that inside of 5 years, growth as measured via GDP was on the rise at a rate comparable to pre-crash rates, and inside 8, GDP surpassed peak 1929 levels (http://en.wikipedia.org/wiki/File:Gdp20-40.jpg ). Heck, if the top tax rate hadn't been raised to 80%, they might have even avoided that dip there in late 30s.
Tweet, tweet.
Agreed.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
Yeah. I'll go ahead and ignore this recession. Keep in mind that a significant portion of the "tech" workforce works at defense contractors and other companies that mostly only have one customer -- the U.S. government. For folks like us, job security isn't really based on the economy, but rather on programmatic milestones(e.g. design phase for large project is complete) or political issues (e.g. large project gets canceled, new administration comes into office -- yikes!). We won't get much of a raise this year, but we probably don't have to worry about losing our jobs unless we happen to work on a project that Obama doesn't like. Even if I do lose my job, my industry will still be thriving and I can easily out-compete other candidates who don't have experience with defense contractors.
No, its not.
There are, empirically, booms and busts that are observed to occur in real economies. Whether they have anything to do with "capitalism", however defined, is far less clear, and certainly not true by defiition for anything but the most bizarre definition.
Resulting in an almost immediate return to growth and substantial decline from the 25% unemployment Hoover had driven the country to.
Some kind of "compounding".
For years I've been seeing slashdot and the "DESTROY TEH MICR$OFT" flag. Well, looks like you've gotten at least part of what you wanted - 5000 layoffs. Happy now?
The second part is that those mortgages wers sold sliced, securitized and then traded as more exotic financial instruments.
At the end nobody, not the bankers, not the regulators knew what the heck was going on.
If the securitization of mortgages had not been allowed, the problem would have been contained mainly to the US and even there it would have not dragged the whole economy.
IANAL but write like a drunk one.
Read about the Mississippi Company and John Law for your amusement.
And what about Enron?
IANAL but write like a drunk one.
Just a guess....
IANAL but write like a drunk one.
between cutting jobs and changing market cap.
Market cap is determined by the STOCK MARKET. 1980-1985 marked the commencement of a 20 year bull market, the longest bull market in history.
In bull markets stocks trend up, in bears they trend down. The underlying business of the company has much less to do with stock performance than market sentiment. Company performance and stock price are not tightly coupled. As long a company does not totally F up in a bull market, and they are in a hot sector, the stock will go up.
That being said, Since GE was a bigtime defense contractor and 80-85 marked the beginning of Reagan era defense spending, GE was going to do well. That era also saw some very rapid monetary expansion and GE Capital got a healthy piece of this business too.
Anyway, I think the waters are pretty muddy on a causal relationship between cutting divisions and workforce, and subsequent stock market performance.
And we all know performance monitoring of human beings is a bloody exact science.
IANAL but write like a drunk one.
When IBM starts laying off Indians as well as American workers then that will be news.
IBM supposedly post a gain last quarter in spite of a 20% loss in hardware sales. This gain is a form of cooking the books. Many US contractors have been let go while the Indian L1 visa holders are still being imported to work at a greatly lower rate. Secondly, IBM forced all the contractors on the project I was on (software services) to take a 13% or more pay cut. Without bothering to renegotiate the contracts. And in most cases at the end of a pay period and they found the cuts were retroactive to the previous pay period. This while they were still being billed at the original rate to the customers. This brings IBM management(Sam Palmasino and BOD) down to the same level as chain and purse snatchers at the local mall. Stealing from those who can least afford it. And on par with Sanjay Kumar of Computer Associates whose shenanigans to manipulate the bottom line for stock price and bonus compensation landed him in federal jail.
When you sign a contract guaranteeing someone a certain level of pay then renege it's the same as theft of services and is theft in actuality. It is also breach of contract. There will be repercussions for this as some of the people I know are getting lawyers to fight this.
I bet Ballmer isnt takin a pay cut.
In two words: political economics. If the lawmaking and enforcing institutions are the custodians of private property - as capitalism requires - then legislation enacted is for the protection of someone's capital. The curious part is that capitalists, in the pursuit of profit maximization, do not have homogeneous interests other than limiting labor syndicalism and maintaining venues for continued capital expansion and resource exploitation. These interests have led to curious legislation that was influenced by the highest bidder, but not necessarily aligned to the interests of all capitalists. Legislation is how capitalists play chess.
From TFA:
While companies are supposed to look for onshore talent before hiring overseas, many companies -- including IBM -- find it easier to skip that step and go straight to petitioning Congress for more H1B visas. It's not that the workers brought in from overseas have talents that cannot be found in the US, it's just cheaper to ship the talent in from overseas, with predictable results: record profits for IBM, resulting in big bonuses for the execs, more layoffs of the U.S. rank-and-file, followed by more petitions to Congress for still more H1B visas.
===== Murphy's Law is recursive. =====
Rather than cut staff directly, why not lower everyone's wages by an equal percentage? (After an initial dead-wood clean-up.) Eventually people will start leaving on their own if it drops enough.
Table-ized A.I.
If nothing else, the depression length information is pretty informative, and the argument about public vs private investment is pretty close to the heart of the matter...
Libertarianism is rich wolves and poor sheep playing gambler's ruin for dinner.
You're absolutely right! That's the exact point I was trying to make.
....whoooosh!
You know the economy is bad when huge companies like these three actually have to lay people off.
If nothing else, seeing how they responded to their time at MS is a great way to judge personality.
Engineering is the art of compromise.
Ballmer said they would hire 2-3000 at the same time they are terminating 5000 (over 18 months).
Helps if you know SharePoint though.
Well, MS must expect bad times. Obama's IT stuff does not like 20th century OS, they need true 21st century IT infrastucture. At least this article says so:
http://practical-tech.com/network/obama-vs-microsoft/
http://projects.washingtonpost.com/congress/members/o000167/votes/
130 times as a Senator for Illinois, he chose not to vote 'for' or 'against', but rather to simply declare that he was 'present' for the vote nearly 130 times.
http://www.nytimes.com/2007/12/20/us/politics/20obama.html
His cabinet is full of DC lifers, he has never championed 'change' either as a state senator, nor as a US Senator; what makes you believe that he is capable of preserving anything? His resume' is pretty unimpressive - but that really doesn't matter does it? He's the 'messiah'.
Panic of 1837
Collapse precipitated by Andrew Jackson's withdrawal of the federal government from banking affairs.
I finished my first degree back in 2001. The economy was in the shitter. I managed to get a job and rode the problems until I decided to go back to school. The economy went back to the good times while at school. Now I'm graduating again and the economy is in an even deeper shitter.
Let me guess, I should stay in school?
[alk]
>Care to cite an example?
The situation we're currently living through right now will do nicely I think.
Just thought I'd mention it:
http://www.usatoday.com/money/economy/2009-01-21-job-cuts_N.htm
Under the current law, the number of visas is:
65,000 in the general pool.
20,000 to those with graduate degrees from U.S. universities.
Unlimited to non-profit and government research laboratories and to universities.
http://www.cis.org/H1bVisaNumbers
And don't forget, the h1b is only one of two dozen work visas that the US offers. Other unlimed visas include: L-1, O-1, and Opt - I think.
Damn it! Damn it! Damn it!
I finally start making forward progress in my career and this shit starts happening all over again!
Damn it! Damn it! Damn it!
Nope. Roosevelt cut off several incipient recoveries at the knees by increasing government interference in the economy. He imposed wage and price controls, and did everything he could to keep prices high, including imprisoning people who dared to sell their labor for less than the NRA demanded. We could have recovered in the early 1930s, but FDR just didn't know when to quit and let people make their own economic decisions.
Morgenthau knew that the new deal was a disaster. He said "I say after eight years of this Administration we have just as much unemployment as when we started. ... And an enormous debt to boot!" Unemployment was higher in 1939 than it was when FDR took office.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I don't think H1B workers apply in the OP's comment. They would count as US workers, and he wouldn't be complaining about shrinkage of his immediate workplace.
To do list for Windows
The position of any Keynesian is completely discredited by the historical record
I'm interested, but since you were apparently quite wrong about the relative lengths of historical depressions, forgive me if I'd rather see some citations rather than taking your word for it.
Krugman's position that FDR didn't go far enough is absolutely asinine.
How so?
And you do realize that Krugman doesn't believe that across the policy board, right? Certainly on the demand side, but hardly on the taxation side, where he's criticized both Hoover's and FDR's increases.
Tweet, tweet.
Now, if only the skinny guy with a funny name and big ears were to hear that and do something about the way the damn thing is taught.
I have a friend who is working in Google saying there will be around 6000 people layoffs happen in next month. There will be around 80% happen in U.S., and 20% in other offices around the world.
That is my anecdotal evidence.
I conducted interviews several times, and sorry to say but people from the US and UK were substandard, when we were lucky to get any local people actually applying for a job.
In Germany you can't get a programmer with advanced skills at all, thus the German government had to make a drive to import people with skills from India.
This is not a coincidence: people in developed countries are shying away from hard sciences (in the UK we have more photographers per capita than anywhere else, and the fastest rising occupation is hairdresser).
Just stoping foreigners that actually will spend money n the local economy is complete balloney.
IANAL but write like a drunk one.
It is monumentally idiotic to suggest that a company can wait to fill a position for 2 years.
Allow me to put my anecdotal evidence forward: the position I used to hold was vacant for six months. I know this because I applied initially but I wasn't really commited to a move, which showed and I was not selected.
6 months later I was ready to move, and to my surprise, my position was still not filled, so I applied again, this time really showing what I am capable of, and got the job.
Once I was in the company we interviewed people for other positions and the average time to fill it was 3 months. 60% of the time the best applicants were foreigners.
This is the UK of course, but I know about companies in the US and Germany having the same problems.
IANAL but write like a drunk one.
Like what exactly?
Ha, ha, ha!
IANAL but write like a drunk one.
Now is when companies are going to realize that the chap in India with just one or two years experience can't replace the grumpy old Engineer that has 15.
Companies are idiotically haemorrhaging their corporate DNA, sooner or later they will realize the monumental mistake they have commited and those people with good skills will benefit when the pendulum swings back.
IANAL but write like a drunk one.
In my company they fired complete departments at once.
If you are really suggesting that such actions are not random then your are even more naive than your initial comment suggests.
IANAL but write like a drunk one.
In Mexico, in the 80s, when our government defaulted and we had inflation of 150% my dad just used to shrug his shoulders and say "I'll find a way", which he dully did.
No questions the current situation is atrocious, but you don't help yourself by being too pessimistic (after all 9 out of 10 people in rich countries will keep their jobs, if we accept the most pesimistic forecasts, which is a substantial majority).
IANAL but write like a drunk one.
The problem with this theory is that it conflicts with the actual facts, which are that a strong aggregate recovery began in March of 1933 and continued until the recession of 1937-1938 and resumed thereafter. There's simply no place for the "several incipient recoveries" that Roosevelt supposedly "cut off at the knees".
By the usual definition of "recovery" (i.e., ending a recession) we did begin recovery within 3 months of Roosevelt taking office. The only reason the vast improvement under Roosevelt prior to the war is, nonetheless, classed as part of a "Great Depression" that started under Hoover is because Hoover made things so bad over the years between 1929 and Roosevelt taking office in 1933 that several years of strong GDP growth and a substantial cut in the unemployment rate still left most people worse off than they had been before Hoover drove the economy off a cliff.
Except, of course, in the real world, where 17% is less than 23%.
The rest will be killed off by a virus spread via unsanitized telephones.