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Skype Execs Purged On Eve of MS Takeover

Posted by ryuzaki0 on from the out-with-the-old dept.

jfruhlinger writes "You might think that the executive team that engineered a lucrative buyout for their company would be rewarded. But eight execs from Skype instead found themselves fired just before their company was formally taken over by Microsoft. It appears that this move isn't meddling from Redmond; rather, the private equity firm that owns a 70 percent stake in Skype wanted to cut back on the payout to company execs that would normally accompany this kind of transaction."

10 of 300 comments (clear)

  1. The invisible hand of captialism by Pope · · Score: 5, Insightful

    Always seems to be carrying a very sharp sword.

    --
    It doesn't mean much now, it's built for the future.
    1. Re:The invisible hand of captialism by s73v3r · · Score: 4, Insightful

      Yeah, this argument is retarded, as everyone else in the sector enjoys the same protections on their software. Basically, it says, "If I could compete with Microsoft by selling their OS, Microsoft Windows, then they wouldn't be a monopoly." Basically saying that, if you could just clone their software and compete with them by selling the same thing, yet you without all the R&D costs that Microsoft put into it, then there'd be "competition".

      This also completely ignores the fact that Microsoft forced a bunch of OEMs to pay them royalties on all computers, even those without Windows, in blatant violation of all anti-trust laws and anti-competition laws. Face it, Microsoft became a monopoly of their own doing, not by being propped up by "government."

    2. Re:The invisible hand of captialism by The+Great+Pretender · · Score: 4, Informative
      "It appears that this move isn't meddling from Redmond; rather, the private equity firm that owns a 70 percent stake in Skype wanted to cut back on the payout to company execs that would normally accompany this kind of transaction."

      I'll let you into a secret, they knew, probably got paid well and Microsoft were in on it.

      1) As an exec in company like this you come in with a contract that has all departure routes covered, outside being fired for cause. It's standard practice and if you didn't require it, you wouldn't be doing that job. So yes, they were made whole and that means a lot of cash, probably a chunk of equity prior to the sale.

      2) Microsoft negotiated the options for the buy out and that means assessing and pruning the management at Skype, before the sale. Skype didn't just futz with the company on the eve of the sale. Removing the folks MS don't want before the sale takes the focus off of MS for clearing out who it doesn't want. It would be a negotiated point.

      3) My guess is that these execs are M&A (Mergers and Acquisition) specialists. They were likely specifically bought in to engineer something like this. So they've done their job and they'll move on to the next.

      You don't sell/buy something for $8.5 billion and not talk about everything. Trust me, everybody knew way before now who was staying, who was leaving and how much money they were going to make.

      --
      A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort.
  2. when the victims of corporate psychopaths by circletimessquare · · Score: 5, Insightful

    are other corporate psychopaths, it's hard to feel sympathy

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
    1. Re:when the victims of corporate psychopaths by DontBlameCanada · · Score: 5, Interesting

      IMHO, the only thing worse than execs of of a corp getting paid off at the expense of employees during a take over, is when a nameless venture cap org does.

      We don't know the whole story, but if venture cap nuked execs (that might possibly have been instrumental in making the company successful) to increase their own take, that is *WORSE*.

  3. Shed no tears for them. by 140Mandak262Jamuna · · Score: 5, Informative
    These guys are big fish, swimming with the sharks. For example Gurle joined in Jan 2010. Just 18 months with the company. All the fired ones seem to be the MBA types who move in just to dress the company up for sale or IPO. Not the founders and early grunts who toil in garages and warehouses during the very early days living on pizza, sleeping in the office, desperately churning out code on a shoe string budget, not knowing if they can make pay roll next month.

    These suits ate little fish in their time. They got eaten by bigger fish. They will again start eating little fish once again. Just stay out of their jaws, if you can.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  4. Don't feel bad, dear managers by Opportunist · · Score: 4, Insightful

    You know, every time a takeover happens some people get fired.

    I am delighted to see that for a change it happens to you.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  5. Re:Fired? by eln · · Score: 4, Insightful

    At the executive level, "fired", "resigned", and "laid off" all mean the same thing. At any rate, even if they didn't have golden parachutes as part of their employment contracts (and they're idiots if they didn't), I'm sure they have plenty of stock and stock options to dry their tears with.

  6. mergers are statistically bad for everyone by smoothnorman · · Score: 5, Insightful

    A wise old CEO wheezed unto me: "A merger is a risk to everyone except one of the two CEOs - to everyone else it is a danger". Mergers reduce competition, so the market loses; mergers cost stockholders, at least in the short-run; mergers are engines of redundancy so it's a threat to all the employees. The only possible virtual gain is an investors' promise of less competition in the marketplace. Almost everyone loses. So the next time you read: "Massive-corp to buy out Macro-corp!" try not to cheer for the two original owners who get their one-time lottery prize, but instead pause in lament for the majority and progress in general.

  7. Re:Ah, but I wanted to blame Microsoft by captain_sweatpants · · Score: 5, Insightful

    You must not have noticed the reference to them being executives.