Rumors of Upcoming Microsoft Cut-Backs
Rumors. Microsoft layoff and cut-backs and Reduction In Force rumors. That's all I have for you. Rumors and second-hand speculation and the comments left by the fine, good-looking folks who participate in the conversation here. So pour yourself some holiday cheer and dive in.
What have those fine folks been sharing over the past couple of posts here? Bad news on the rise and with perhaps January 15th 2009 as an interesting day for Microsoft news. Bad news. 15 Jan is a week before FY09Q2 quarterly results and it's better to share as much news, good and bad, before the results are released vs. surprising Wall Street (something I think we've learned).
It all starts with...
Just heard on the finance grapevine. MSFT layoffs are coming on January 15th.
They are substantial.
And then some curious meetings:
they lost 12 people in STB [...] looks like "feedback" reviews are underway to get the a-10's out of the picture as well.
What kind of meeting? Perhaps like:
I got invited into one of those special "manager" meetings on thursday which resolved to absolutely zero activity other than asking opaque questions for which the answer was already known.
"fact" finding in order to dismiss an argument OR dismiss me :)
shall find out 1/15
In Live Meeting:
Live Meeting is one of the worst places to be right now - and it has gotten downright hostile and strange in recent times. People are pulled into meetings with management where they get interrogated about what they are working on ("We want to hear what you think you know about XYZ, this is not a knowledge-sharing session..."), people are given impossible tasks like coding things not yet designed, automating things not get coded, documenting unfinished ideas (all subject to being cut next week too). On top of that they must account for their time by the hour. Live Meeting is in its death throes.
Breaking-up when you have no budget is another tactic (in STB):
Our 120+ person org has just been broken up due to lack of budget. About 1/2 the team is staying, the other half is going to a number of different teams within the larger org. So far, we all appear to have jobs, but man, what a shocker, I thought ours was one of the more stable teams.
Not sure what happens to our Director, he seemed a bit shocked himself when he delivered the news today. I also don't know if this is the first step towards a lay-off, but for now, it seems we'll have jobs for a few more months.
Ugh, not good, not good at all.
I got pulled into a lunch 2:1 today and got given good news on "you have 4 weeks left"
STB - > Server
Rumors! Like the following that I've heard wandering around chatting with folks before the holidays:
I've been hearing some stealth layoffs around the SQL and BOSG groups, around 70+ people were given 6(?) weeks to find another position within the company, otherwise they are laid off.
Anyone know others?
Is the following a list of head-count cuts or expected percent cuts?
- 3 in omps
- 9 in stb
- 12 in msd
- 7 in devdiv
- 18 in UA
- 5 in MSX
Beyond product groups:
Finance is cutting 10% of work force.
I will agree that we'll be casting a hard eye at consistent 10%-ers during MYCD:
If you have to 10% an employee who was in this bucket last review you may well find yourself showing them the door. This means that we can meet VP goals of no lay-offs (we are pruning poor performers) yet be seen to be reducing OE
But who is taking the cut?
The news is in. All the money making groups cut 10% of the work force. The money losing groups hires.
Vendors get it, too:
Vendors are also having it bad. The funding for our project stopped and our vendor team of 28 people have been asked to leave immediately. All of us have been asked to move to India by our parent company. [...]
Who should be taking a cut? One commenter points to GFS:
Do you know who was killing Microsoft economically from past several years- think think think? Being one of the 65 level in this organization and spending most of my career here - I can tell you that this group was living lavish life from past many years (thank god – we have some economic crisis now and people are asking some tough questions from the managers here). I know many of you have already guessed and you are right - this group is called "GFS - Global Foundation Service" and DebraC is leading this group. (Did I use the word leading?) If you want to know how capable she is to lead this group, I encourage you to watch her latest all hands streaming that you can find on MSW. [...] There are billions of dollars hardware purchased every year across this group without any planning and I can assure you that 50% of them are not even used or required at first place. Most of the hiring in this group is not for getting things done or being innovative in datacenter world but each manager here trying to build their own empire by just hiring whether they really need it or not.
Local impact? One commenter muses:
As someone whose product was recently whacked, I sure hope there are some RIFs before there are out-and-out layouts (at least in my area!) Scary... 'cause in this climate, it's going to be darn tough on the economy to dump a bunch of talented folks to the curb and have them competing for slim pickings out in the rest of the world. The ripple effect on the Puget Sound economy alone (assuming the layoffs are substantially here) would be staggering. :-(
Okay. So first I'd love to hear what you have heard or know as well, though I realize some of you might want to stir the pot with made-up fluff sprinkled with schaedenfruede - please don't.
Second: you have to realize that the upcoming 2009 Mid Year Career Discussion review process is one of the most important career inflection-points for you that we've had in a long, long time. Already my team is being asked to review people on the HR Watch List deeply and especially look at any two-time-plus 10%'s, no matter whether they are Situation I (eh, should be fired) or Situation II (effective but have reached their career maximum - again, a horrible, horrible concept). The upcoming Stack Rank for Mid-Year is going to be super-important for determining who has to go first if your team is given an n-percent budget to cut-back on. And yes, if we fire the current 10%'ers we drop down the lower 70%'ers into the 10% bucket. So just because you don't end up in the 10% bucket don't get all happy about yourself unless you're well into a high Achieved / high 70% bucket.
My suggestion to you: know when your team's Stack Rank (aka Calibration) meeting is and be very aggressive about enumerating your accomplishments this past year with your manager and asking your boss where they believe you rank within the team. Hey, I hate this system too, folks, and by me giving you advice I'm trying to prescribe some preventative medicine, not endorse the lifeboat drill that is Stack Ranking. And if you have Skip Level meetings with your upper management, you'd better figure a way that you walk out of that room with them loving you.
And if you get your six weeks, you're going to have to depend on your existing Microsoft networks. Folks I know with open positions have really ratcheted up their choosiness about who they want to bring into their group and are exceptionally uninterested in unknown RIF'ed people wanting informationals, assuming that they are 10%-ers.
Third: let's say we are having intensive cutbacks and/or RIFs and layoffs. It is absolutely essential that Microsoft steps back and asks, "Whoa, how did we get here and who was leading us?" How did we go on a drunken hiring binge and continue it even though a year ago most of us realized we were dropping into a recession? It's irresponsible leadership. It's especially irresponsible to the people we've hired and to the people incoming with recent offers. If you don't think too deeply, it's easy to be sipping on your Starbucks in Crossroads Mall typing away at how Microsoft needs to mass fire people so that it can refocus on essential business. But when you do it at a time when the economy is in the crapper and job openings at Microsoft is near nil is unforgivable.
An important consequence is to ensure we never do this again. The first step is to cut out the people who got us here, especially by making weak hires. Everytime someone who you said "Hire" to on an interview loop gets a 10% review your ranking on hiring goes down. If they become good attrition you get dropped from interviewing. You obviously aren't a very good judge when it comes to hiring for Microsoft. Likewise, if you said "No" to someone with a bad review or "Yes" to a star performer, your ranking goes up. And all of this is made very clear to you, versus you wondering one day, "Hey, how come I haven't been on an interview loop in a while?"
Next, if you've been in the way of quickly load balancing within your division according to needs vs. empire building: *poof* you're either gone or demoted.
Come 22 Jan 2009 Microsoft will be asked by the analysts what it is doing to contain costs. And I believe Microsoft will have an answer. I think this is one solution that you don't want to be a part of. I'm all for cutting back, but it should have been done long ago, responsibly, vs. forced upon us. Because I believe when things turn around, groups will be lighting the sparklers and cracking open the Kristal and hiring madly again.
(Edit #2: added links to all the comments I quoted so that readers - especially first time visitors - understand the source material. Edit #1: fixed a double paste.)
310 comments:
1 – 200 of 310 Newer› Newest»This is silly. Microsoft is one of the stronger positioned tech companies out there with >$40 billion in cash. The right strategy at this point would be to HIRE the great workers that other companies cannot afford to.
Where to even begin? A number of groups have been on a hiring freeze for over half a year (think Robbie). So this "crazy hiring" that you talk of is unknown to them. Next, this company simply could not go through a round of layoff (mind you I did not say a RIF, as we've all seen those) but the H1-B rules would force all of the cheap labor to be shown the door first, regardless of ranking. And Microsoft lives for ranking. Microsoft wakes up in the morning and get an enormous boner over rankings. So don't suggest for a second that there is some dismal, far reaching lay off coming down the river. Microsoft would never give up the chance to use selecting RIF'ing to demote the lowly ranked. If anything there will be selective investments, as has been stated time and time again. But no, Microsoft will not be showing the H1-B employees the door. Never going to happen, in my opinion.
Please only let competent E/20 - E/70 managers make these calls. Worst case is that we let poorly performing middle managers cut ICs who have been poorly supported.
I would rather see each person RIF'd replaced with a great person who got RIF'd from somewhere else.
exactly what microsoft needs. a cathartic time.
old dead wood: products, managers, groups, (sadly) people ... its time to go.
my suggestion is to cut once, cut early, cut just a little deeper than is needed.
just ensure there are great products in the pipeline to recover revenue ... in 2010 this will be reported as "the cuts microsoft needed to make"
taking too long, and having to go at cuts for a second time looks like just poor and ineffective management.
I shudder to think what the 'smokey back room' gamesmanship and positioning is like if this rumor bears fruit.
Let's keep in mind that the generally accepted behavior of most middle management @ Microsoft isn't necessarily:
"I will do what's best for Microsoft first, then me second."
It's "I will do what's best for me first, then Microsoft (as long as it doesn't result in me getting called on the carpet)."
How many people are going to get thrown under the bus?
Also, is there a level distribution the company wants? Can you be effective being 64+ heavy? Can you be effective with a ton of 60/61 and some L66-67 with few "Seniors" in between?
Layoffs are the logical extension to bad exec level behavior, as Mini alluded to. I cannot imagine poor hiring behavior will magically be corrected by strong firing behavior. There will be poor behavior there as well.
Good luck to us all. Better load up on Company Store items. At least they're waiting until January. Lot of poor bastards elsewhere that got shit-canned during the holidays.
I don't agree with the first poster, this company has grown too much for its own good. The additions have not been a net positive, and adding anything else (100k employees?) is going to help the ship to sink even quicker.
I think that it should be a combination of trimming the fat and poor execs who got the company in this mess, and what the first commentor mentions. But if you're hiring those that get trimmed by other firms, you need to really be smart about hiring, really screen and be rigorous about interviewing and only hire the GREAT ones. But now having been gone from MSFT for 9 months, I think that it's totally time for the company to lose MANY people. Let me suggest a few utterly fat and bloated orgs that could just disappear or downsize with little impact to daily business... EPG, DPE, Services, Office (big part of it), Windows (yeah I know even pending new product), Search...others?
If we do a big set of layoffs now - especially if it's accomplished by canning entire groups whose product is eliminated rather than sifting through the lower-ranked employees - we are going to be in a world of hurt when we're scrambling to turn things around as the recession eases. Last time we were smart (and as the first commenter pointed out, had the cash buffer to do so) and didn't just lay a bunch of people off to "contain costs." Companies that did that were dying to try to get back on their feet when the economy turned around. We were sitting reasonably well. What we did with that position is another issue, but at least we had people in place to get cracking on new projects rather than combing the marketplace while every other high tech company was doing likewise.
I hope MSFT is also painfully aware of the morale cost of casting about for "what to do, what to do??!" for so many months. I think that's part of what you were saying, Mini: that if we'd forecast ahead and PLANNED for this downturn instead of continuing to do "business as usual" (throw money and people at everything everywhere as much and as fast as possible), we wouldn't have been caught in October realizing that we didn't know what in the heck all these people were doing and whether it was the highest priority projects or not. It's excruciatingly embarrassing (but...not that surprising) that it's taken MONTHS to just do an inventory of where everyone is and what they're doing (by freezing them in place so they can be counted) and decide what we SHOULD be doing. What kind of a monkey business are we running here? And who is running it?? Those are the hard questions that our board of directors. $40 million in the bank apparently makes for lazy, lazy decision-making. It's time to pay the piper, and the backs of the workers will be the ones broken for it. :-(
This is to all the FTEs who feel stuck at Microsoft, or less secure about their FTEness. I recommend putting your resume in order and hitting the job market. You probably won't find anything-- not because no one is hiring, but you've been living in the Microsoft bubble and haven't been developing the skills the market demands. This will give you a chance to see what skills are really in demand, and make moves to align your work with skill development that make you hirable. Being FTE at Microsoft is over-rated, I think people like it for the job security. The reality is if you're not pushing yourself to the point that lots of companies want to hire you, you're not going to be a star at Microsoft either helping the stock price goes up. The comfort of FTE is an illusion, it leads to mediocrity and flat stock prices.
People are scared about the job market as it is currently, but I do not think it is that bad for techies. I lost my job in November (startup ran out of money) but had found something by December. I had a harder time 10 months ago, when I first found a job outside Microsoft. Sure Microsoft is good to have on the resume, but I had nothing outside Microsoft and no skills beyond Win32 C/C++ development. I took a pay cut then, but did it strategically so that I'd be gaining skills other companies were hiring for. Now I've a job that I think is a lot better than my FTE gig at MS. My job security comes not from having a FTE position at a big company, but by having a skillset that is in demand and a resume that demonstrates results.
Its stressful to look for a job, but the challenge is more real and more rewarding than dealing with that bi-annual review crap. Grab the horse by the reins and start owning your career and skill development. Stop hanging around waiting for the stock to rise.
I don't think it's silly. Regardless of its size, a company is measured by its profitability & long term perspectives for growth. It doesn't matter how much money sits in the bank - in fact having a lot of money in the bank is living proof that Microsoft doesn't have a clear idea where to invest it for future growth.
So (to exaggerate the argument a little) , if a 90,000 Microsoft is performing poorer (from a profit & growth perspective) than 1000 startups with 90 people each, then we have a problem, Houston.
Back to firing: IMHO the most interesting number to look at is the percentage of fired senior vs. junior people.
One of the problems with Microsoft is its mid-life crisis: too many seniors that are very good in "hanging out there". Over time, this "dead wood" accumulates.
So is this just cutting the leaves to make the tree look round so Wall Street will love us again, or are we cutting dead wood as well?
It will be interesting if this is restrained to cutting just 10 percenters or if it will be used more broadly to RIF some top performers who are also vocal.
Regardless, if you think you're on the way out, be sure to maximize your benefits in early jan -
* Get your new eyeglasses/contacts
* Get your annual physical
* Fill those prescriptions
* Get all your dental work done
* If you haven't already, get your gym membership set up and paid for
* Use your floating holidays
>How did we go on a drunken hiring binge and continue it even though a year ago most of us realized we were dropping into a recession?
The right decision would be to penalize the leaders. Read VP and partners. Cut their pay by 10-20% (bonus + stock ) or more for leading us to this situation.
The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics.
http://www.nytimes.com/2008/12/22/business/22layoffs.html?hp
Any large organization like MSFT will acquire top talent regardless of a layoff. Just look at their hire of Chi Liu.
However, MSFT's stock has gone no where but down in the past several years. They need to do something to show to wall street they are serious about controlling costs.
This is actually good to trim down a bit and ensuring that all quarters are doing their work, no redundant and no team just sitting around waiting for paychecks.
Even GOOG is starting to trim up to 10,000 vendors/contractors.
I have been hearing these rumors as well. This is another data point that shows Ballmer is a moron.
Certainly MS has plenty of fat to trim. But instead of cutting the fat in good times he had to wait until GD2 to do it cause he lacked the balls to do it otherwise.
Now he will tank the Seattle economy and these poor schmucks will be without a job before Xmas in an environment where there aren't many jobs to be had.
If he wasn't BillG's best buddy this idiot would have been fired long ago. No other F500 company would stand for this type of inept performance by a CEO.
Thanks Steve. Your destruction of what Bill built is now complete!
MSR is cutting PMs, RSDEs. No researcher is cut.
Imagine if in addition to cutting whole teams (we can all find places to do that at MSFT), that those teams that got cut also saw MSFT selling the underlying technology and patents for cash. Imagine that...double the bonus. :-)
As of June 30, 2008, we employed approximately 91,000 people on a full-time basis, 55,000 in the United States and 36,000 internationally. Of the total, 35,000 were in product research and development, 26,000 in sales and marketing, 17,000 in product support and consulting services, 4,000 in manufacturing and distribution, and 9,000 in general and administration. Our success is highly dependent on our ability to attract and retain qualified employees. None of our employees are subject to collective bargaining agreements.
> All layoffs are in US.
>Let me suggest a few utterly fat and bloated orgs that could just disappear or downsize with little impact to daily business... EPG, DPE, Services, Office (big part of it), Windows (yeah I know even pending new product), Search...others?
HR, Finance, IT, Ray Ozzie groups, Adcenter, MSR, Legal, Marketing
And Merry Christmas to you too! Let's try to focus on our families during the holidays and come Jan 2 be alert for potential layoffs.
The time is upon us to unionize! Worked well for the automakers. Software Engineer Local 404
Please tell me we're not going to peanut butter layoffs.
This is basically a passive agressive way of continuing to not do anything and demonstrate the 'leadership' doesn't know what to do.
Exactly the same as what we've been doing the last 5-8 years which is chasing other new business leaders tails (Apple, Goog, Nintendo, etc). Only this time we're chasing the tails of wall street.
Can't believe I've worked for a follower company so long, yet have prided myself on industry vision.
10+ years of sinking stock prices due to reactionaly approach to business should have warned me.
Now we get to chase tails with less people (probably good), while owning channels and business we 'get' with less (not good).
For chistsake, split the co apart willya and let all the brilliant ideas sink or swim within they're own merits vs forcing integration across BGs.
Companies that did that were dying to try to get back on their feet when the economy turned around.
What turnaround? No turnaround is projected for 7-10 years. That's plenty of time to recover from layoffs and staff up slowly by only letting in the best of the best. That also assumes that Microsoft doesn't make any additional product slip-ups or loses any further marketshare, neither of which is a given.
I wouldn't be counting on any turnarounds to save us from layoffs if I were you.
MS should use voluntary layoffs, with great packages, like a whole year's salary, or something like that, I'm sure people will be happy to take it. But seriously, to really cut costs, it's much more effective to cut compensation/stock award levels from the top,(Principle and above) it's not as painful I suppose.
First off, many thanks Mini for starting this thread. It's an important subject, and we all know something big will go down.
Now, what exactly is going to happen? No one knows yet, except for lots of innuendo and speculation. In my estimation, mass layoffs across the board are unlikely and unnecessary, at least as a first step. I agree, there's plenty of dead-wood that needs to be eliminated, and let's peg this number at around 5%. So, that makes is about 4,500 people, mostly in the US, I assume. But, you can save a significant amount of money on top of that (or even without it) by doing the following:
1. Acros the board 10% pay-cut. I for one make exactly $99,000 and I can certainly live on $90,000. Heck, if push came to shove, I can live on $80,000, too. I'm sure that most people, given the choice, will rather have a job with a pay-cut than no job at all in this kind of environment.
And I don't want to hear from people that things aren't that bad. Wake up folks, we're headed to double-digit unemployment and there's a 50% chance of a depression. Dow 5000 is not a lunatic assessment, it's a definite possibility. Things are horrible right now, and they'll get worse.
2. Severely restrict or eliminate most fringe benefits. This includes morale budgets, anything that you expense monthly (such as broadband), Prime-card, free-soda, milk, tea, coffee, etc.
3. Introduce co-pays or some of kind way for employees to share the costs of healthcare.
4. Eliminate the Pro-Club option, or make the employees pay for most of it. It's a benefit I'd like to have, so I'll pay the $80 out of pocket to continue my membership.
5. Big time cuts in travel and training budgets.
Anything else? Will all this sink morale? Maybe, but most people will realize it could be far worse. People can leave if they don't like it. Those who remain will probably work harder because surely, when you've cut everything to the bone, and things don't improve economically, the next step will be layoffs, and no one will want to be in that group.
Merry Christmas and Happy Holidays to all. Like one poster says, enjoy the next 2 weeks, and come Jan. 2, let's start to worry. :-)
College recruiting (at least in Office) is still firing on all cylinders - managers are being told that there will be a seat ready for every great college candidate we want to hire. The pool of highly qualified grads desperate for a job is as deep as it's ever been in recent years.
So if that is true, I'm skeptical that MSFT will announce anything that even remotely sounds like layoffs. Can you imagine the lawsuits if people are ushered out one door with a pink slip while fresh college grads walk in the other door?
Instead we'll see tightening of performance standards and aggressive managing-out of the low performers. The last thing anyone is going to call it is "layoffs"...
Not all layoffs are in the US - one Top10 sub announced in an all-hands that they are laying off 1 FTE a week for the next 25+ weeks (to not cause an alarm). No news about what happens to the vendor/contractors though...yet.
Microsoft is a great company and simply needs to act on what the consumers are more than happy to tell them. There are alot of great talented people there that are frustrated by not pursuing really cutting edge solutions such as Apple provides.
Speed up Windows alot, make it more friendly and useful than Mac (really integrated apps like photos etc). Simple effective network setup. Great user experience.
Office, it takes Outlook AGES to start under Vista for example.
Bring Windows Mobile up to speed-people would love a WM phone that was as cool as an iPhone and worked better.
40 billion dollars buys great talent, or gives incentives if great producers create these products.
Where to begin? Corp. There is an enormous amount of overheads at Corp. Corp is not making money, they are... overheads. In many cases these headcounts origin out of political power-play agendas, see previous post on how to make a career here at minimsft. If KT has any guts, he will make the cuts at Corp, focus on S+S taking marketshare and building a great offering and leave markets out. But I doubt he has the guts. Lets invest in Redmond, that is where the revenue is... (not)
In this month's partner's meeting Steve hinted to layoffs. Mini you were there. Why are you acting as if you are getting the hint from the comments here?
Some 40 000 vendors can still be layed off. Some billion dollars in marketing can be repurposed. Open headcounts can be put in the freezer for good (vaporized). I would be surprised if a company with a market-to-corp profitmargin of 80% need to layoff people or even can layoff people. The question is - how do you repurpose the headcounts you are stuck with, do they have the right competencies etc? Most likely no. I would suggets Steve and the boys to look middle management, look in Redmond and look at Regional layers (reporting only) - maintain field as is in order to protect and hopefully grow market share during the crisis.
Man, lots of negativity here!
Look, things are bad, and in some groups things are very bad. There's a very big management stagnancy problem and a huge lack of risk-taking in middle management.
The question is, what risks are YOU taking? Yes you, the IC. Did you ever put your job on the line and confront management for their idiocy, their stagnation and their poor decision-making? Did you ever start a revolution within your department, made friends with upper-upper management and cleaned up the crap?
It's scary to take risks. What are you willing to put up? I put my job on the line most days because I don't play by the rules and I don't play cover-my-ass. I put my job on the line because I care about this company and I am outraged at the people who use it to their advantage at the detriment of our quality.
You know, all we need to make changes are people who are willing to take risks. So, let's stop putting the blame on the dudes 1, 2 or 3 level higher than ourselves, and start taking risks ourselves. Each person has power. Wielding it is risky. But if you don't, you're the kind of deadwood that needs to go.
Suggestion:
Take a hard look at all products and services. Terminate those products that haven't and probably never will show profit. Bad products come from bad culture.
When I read some of the posts here, it reminds me of one of the many reasons I don't miss Microsoft. (I left after several years)
It is interesting to listen to a lot of the folks here basically throw various org or groups under the bus. It's always someone else's fault the stock is low.. HR, Middle Mgt, VP's, Ballmer.
Don't mind the fact that most of the folks at MS work pretty hard and have families to support and contribute to the local economy and community.
Maybe some of the folks that people consider "dead wood" are people that finally came to the realzation that there are other things to enjoy in life besides working 60+ hours a week and having to bust their tails to get their meger share of a small pie. While the partners and VP's rake in the lions share of the rewards.
History repeats it'self, Another empire built on the backs of it's workers.
Maybe a lot of these people that some refer to as "dead wood" or "rest and vestors" woke up one day and realized that at the end of the day, realized that they wanted to be able to go to their kids recitle and spend some quality time with family instead of being in the family room on e-mail.
Maybe instead of trying to achieve super star status they just decided that they would come in and put in an honest days work for an honest days pay.
Funny how people's true colors come out when there is adversity.
"Hey as long as I get mine, screw everyone else"
The thing that bothers me about the MS review model is it turns some decent people into competetive, finger pointing Darwinists fighting their way to a lifeboat while the ship is sinking, not caring about anyone else as long as they get on that boat.
Let's say that MS gets rid of the bottom 10%
Then guess who is the next bottom 10%? Maybe some of you perhaps? It never ends does it?
Those of you that wish anyone to lose their jobs in a rough economy be careful, karma is a female dog.
What you put out into the universe comes back to you.
Nice of management to delay the layoffs until after the holidays, but let it leak ahead of time.
Nice way to let yourselves sleep at night by not laying people off before the holidays, but making all us working stiffs twist in the wind.
it sounds stupid.... Microsoft can't do that
I know so many good people who have left Microsoft and so many useless newcomers. I'm getting ready to go to CES and my inbox is full of meeting requests from many of the big Tech companies who will be there, except Microsoft and I write a blog about .Net software development. The past two years the Windows group has paid the air fare and hotels of bloggers who just blog about Windows and this year I see several Windows Media Center bloggers with audiences a tenth of mine crossing oceans to come to Las Vegas, what a wast of MSFT shareholder's money.
Groups everywhere are being forced to cut costs - but good thing the Zune guys had a nice holiday party. At least they're profitable so they can cover the costs... oh wait. Probably cost as much as the annual salary of a couple L60-61s
And to the commenter about Robbie's group being on a hiring freeze for awhile - true, but the only reason they got there is because of "crazy hiring"... 800+ people in Zune alone?
Most groups have already been asked to cut around 10% to forecast which mostly translated to losing or significantly delaying hiring new headcount and cutting or delayed investing in new projects. That will work in FY09 but FY10 and beyond will be another story.
I think the more noticable cuts will start next year and few businesses will be exempt. If you directly impact customers, you are probably the safest but not entirely out of the woods. Everyone else, including even our flagship products, are at risk of significant restructure. All you need to do is pay attention, watch the early re-orgs and start to get a feel for what all the recent executive attrition REALLY meant!
>Let me suggest a few utterly fat and bloated orgs that could just disappear or downsize with little impact to daily business... EPG, DPE, Services, Office (big part of it), Windows (yeah I know even pending new product), Search...others?
HR, Finance, IT, Ray Ozzie groups, Adcenter, MSR, Legal, Marketing
Come on. It's easy to name "the other guys" who ought to cut the fat. How about naming the high-performing teams that you think *shouldn't* get trimmed. And no fair naming your own group - you're biased, and you know it.
But seriously, to really cut costs, it's much more effective to cut compensation/stock award levels from the top,(Principle and above) it's not as painful I suppose.
Not only isn't it as painful (what's one fewer vacation home?), but it saves a lot more money and impacts many fewer people! (And don't give me any of that "trickle down" economics crapola. We all know better than that.)
Rumor confirmed from Microsoft Advertising. There are several areas within the organization that I can confirm an upcoming "reorg." Leaders of undisclosed groups have been asked to represent materials around their groups' long term plans and feasibility. I think this one is going to be big, hopefully they just cut the fat. There is plenty of it from my experience.
Don't assume that firing 10%'ers == 10% cost cutting - it doesn't. To reduce salary costs approx 10% requires cuts into the bottom of the 70% bucket too.
MSFT "leardership" is continuing to show a lack of creativity and balls on attacking the problem.
As many have pointed out, blindly following the 10% mantra is nonsensical in the long run, because sooner or later, you run out of weeds and start to harvest into the good crop. Or worse yet, your good crop begin to throw themselves into the harvester due to plunging morale. It's a self-fulfilling vicious cycle.
MSFT needs to 1) tighten its execution discipline with its best workforce 2) continue to invest in areas that have potential the create the next generation of revenues earners.
Here therefore are my recommendations for MSFT to ride out the funk, and begin the climb back to prominence:
0. Freeze ALL acquisitions for the next 5 years. MSFT has the talent to build whatever is needed. Create the time and space to get it done. So you need good management to make this happen. See item #1
1. Reduce upper-management (L66+). Trim out those who have continued to receive bad MS Poll numbers and reviews. The company saves mega-bucks by trimming the mega-buck earners. You want more folks who are actually capable of doing actual work (ie workers) when we get out of the bad economic cycle. Watch out especially for those who are under a "protection program" by being moved out to some Indvidual Contributor or lowkey management role. We need a few visionaries and a few more great managers to keep the machinery humming. All else are fluff.
2. For workers, trim those continuing to be in the low-performance bucket (10% for atleast the last 2 years, those stagnated at a level AND no longer adding value to the team). Have managers make the call, but there should be another team of managers to review the list (checking it twice, as it were)
3. Do a 10%+ pay and benefits cut across the board. This is not voluntary. For folks who don't agree, well, there's the door. Because if drastic measures are not taken, then the company will cease to exist in a short while. So they get the door anyways.
4. Admit (like IBM of the PC war, during Lou Gertsner's tenure) that MSFT has lost the Search-Ad race to Google. And move on. Continue to invest on the cash cows AND innovative startup-type projects AND futuristic projects that have potential to generate revenue within 5 years. Stop investments in all else.
That's about it.
Every real turn-around CEO artist (vs corporate-raiding stocking-stuffing asset-stripping carpetbaggers) brought in much needed execution discipline whilst investing and leveraging core competencies to pull behemoths from the brink. Read Lou Gerstner's "Who says elephants can't dance" and see (more recently) Mark Hurd of HP as examples.
Some might say core competencies maketh not innovative companies (a la Clayton Christensen in "Innovators Dilemma"). That's a topic of another discussion.
Beware the ides of January.
A few things...
> Hope for fast and deep cut once to limit spreading the pain out over the next 6-12 months
> the commenter who suggested a cross the board 10% pay cut is on crack, cut 10% of the employees instead, leaving the 90% to kick ass. Cutting everyone's salary 10% will just demoralize all 100%.
> The "offer voluntary layoffs" idea is interesting, and I imagine one that a number of folks would strongly consider if it were structured correctly. I feel it is highly unlikely that we'd see some "innovation" here.
> I hope there is accountability at the top of orgs as well as amongst the worker bees, and not just symbolic "spending time with family" moves. If the leadership of a product unit has not positioned the product on a road to success, cut the product and arrange those resources to help the truly strategic efforts (and this includes the right research projects)
I'd start by cutting down the bonuses to 0%. That would represent what? 8-10% savings? I, for one, could certainly accept that.
The most frustrating part of layoffs would be to see the stock price gain 4-5% maybe the day they announce those and to see that same 4-5% gain evaporate the day after.
I like your idea of tracking interviewer responses and loops to past evaluations vs candidate performance, but it has to be both positive and negative. Saying "no" to a good candidate should disqualify you from interviewing almost as much as saying "yes" to a bad candidate. I've been on MS interview loops where a really good candidate comes through, but gets some No Hires because he/she doesn't get the interviewer's favorite topic. Dinging people for saying "yes" to bad folks just makes people say "no" all the time. Although, I understand that you might prefer that, Mini :)
College recruiting (at least in Office) is still firing on all cylinders - managers are being told that there will be a seat ready for every great college candidate we want to hire. The pool of highly qualified grads desperate for a job is as deep as it's ever been in recent years.
So if that is true, I'm skeptical that MSFT will announce anything that even remotely sounds like layoffs. Can you imagine the lawsuits if people are ushered out one door with a pink slip while fresh college grads walk in the other door?
Instead we'll see tightening of performance standards and aggressive managing-out of the low performers. The last thing anyone is going to call it is "layoffs"...
> The college grads will be replacing the higher level employees. Office process will kill any goodness left in them students.
Some 40 000 vendors can still be layed off. Some billion dollars in marketing can be repurposed.
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Partner and principal level salary/bonus can be cut.
All contractors (a few dozen) are getting let go end of month in my group (online), per themselves. No official announcement or word yet for FTE's=yikes.
Is anyone from HR out there with concrete numbers or guidelines for the cuts?
Please let it be voluntary termination packages first.
I forecast the MS review model and internal culture to become even more sharky than it currently is today.
I suggest they cut Ray Ozzie but I doubt anyone can find him.
I have been asked to let go of two of my contractors end of the month even though they have a month remaining in their contracts. Funny because on Dec 1 we were talking of renewing their contracts. Something big seems to have happened in the past couple of weeks, I suppose.
However I still see our Director of Development hanging on in the team despite having no work. He was removed from the team about 6 weeks back and has no one reporting to him or no say in the product.
Anyone advocating an across the board compensation cut (no bonuses, 10% salary cut, etc.) in favor of actual attrition, is an idiot.
All that is is a recipe for pissing off the people you want to incent and retain, while leaving all of the dead weight on life support.
Lay-off's are hard. But there's a class of organizations, and a class of performers at Microsoft that have got to go. Sorry (and I don't say that glibly).
If you think it’s bad in corporate…take a look in the field…it’s worse, far worse.
The sales force in the field is definitely already going under the scalpel…thanks Vista…I know of 4 TSPs that were told they have 4 weeks to find a new job inside the company or goodbye.
Thanks to the wonderful mergers in the financial world…Technical Account Managers at Merrill Lynch, Wachovia, and Morgan Stanley were kicked out of those accounts.
In central region the automakers basically kicked every Microsoft rep/engineer/consulting out till Mid 2009.
And let’s talk about the rest of the field…ya know the people who support our customers and our products….people in Premier/Consulting/DPE.
As our customers are cutting back our PFEs and consulting FTE’s have been forced to fight with each other on getting meager engagements with customers.
Services management was talking as recently as August about hiring upwards of 2000 in FY08.
Now with so many people sitting on the bench and not engaged at customers…is it the fault of the services employees or Corp’s fault for over hiring?
There have been several internal calls within the last week where RIF planning was discussed.
Corp screws up and the field gets the blame…Thanks SteveB.
I suggest they cut Ray Ozzie but I doubt anyone can find him.
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Amen. The guy runs a thousand person org that is bleeding 1 billion a year.
> 0. Freeze ALL acquisitions for the next 5 years. MSFT has the talent to build whatever is needed. Create the time and space to get it done. So you need good management to make this happen. See item #1
Bzzzt. Wrong answer. What MS needs to do is be better at managing its acquisitions, using them to bring in much needed talent and external experience and perspective. One of the biggest problems at MS (coming from the outside, been at MS more than a year) is that people actually believe MSFT has the talent to build whatever is needed. It doesn't, but by that I don't mean that we don't have talented, motivated software engineers (we do), but that we don't have the business and marketing savvy to effectively enter new markets. When we do hire people with the right outside experience, the first thing we do is tell them that what they have done outside of MS doesn't matter and won't be taken into account by long-term senior leadership who only want to replicate the same tired old playbook.
Now with so many people sitting on the bench and not engaged at customers…is it the fault of the services employees or Corp’s fault for over hiring
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You have to hold the CEO, president, SVP, CVP, GM , partner accountable. These guys need to take a pay cut proportional to the people laid off.
Ordinary people are made to pay for the mistakes of these idiots.
Anonymous said, "If you think it’s bad in corporate…take a look in the field…it’s worse, far worse."
Most of the mistakes in the field are because of the 'field'. Overhiring, poor hiring, hiring of buddies from previous employers, overpromotion, taking credit for others work - that's the field.
Sales claims wins that don't happen or are funded by MSFT. MCS has too many people looking for visibility and not doing customer paid work. Solutions organizations are bad on both those counts.
Customer support groups are good and get stuck with the nasty stuff. Unfairly, they'll probably be hit the worst. However the field needs serious restructering.
Allow me to give you a taste of what might be in store.
I worked at MS from 2003-2005 as a product manager in the inaugural MLR class. I started as a 59 in MED, despite having started and run two consumer hw startups, and left as a 59, after busting ass over three product cycles and adding 20 pounds. I watched some of my peers who worked in orgs that magically seemed to offer promotions every 6 months went from associate product manager to director during this same period.
I finally left in 2005 and got a great gig at Motorola (in Seattle) doing mobile advertising product management, with a 25% bump and a better title. Things went well for the first 18 months, and I was quickly and steadily promoted. When Moto ran out of gas (or more accurately, forward looking expectations) on the RAZR the completely SVP of my division canned my entire server dev team in an effort to refocus on 'shiny/pretty hw', and I went from an office of about 80 in downtown Seattle to an office with about 20 people. Still, I survived the layoffs and managed to snag a more senior role (and a raise) managing smartphones, though working in a big office space with so few people was unsettling.
Early this year my division had another round of layoffs, this time more evenly distributed, which brought the Seattle office total down to ~10 people. At around the same time I was promoted, again. The remaining folks in the office developed a 'we've survived' mentality. Unfortunately for me, four of the most solid people I worked with decided to leave (one went to MS), some from Seattle and the rest from the Bay Area.
Over the summer it felt like Moto went into a bit of a death spiral, and internal political fights erupted in public, which led to a rival leader wresting away control of my VP's dev team, and with it most of my meatier responsibilities. Just a few months after this, Moto announced the most recent layoffs, and that entire dev team got cut and the sites in Denmark and Italy were closed, and our site in England was cut way back. A lot of people I've worked with across the division were RIFd or laid off. And the last remaining people at Moto Seattle got laid off - except me and one other person.
For the last couple of months I've been working more or less solo from an office downtown that can seat 120 people, which is just a terrible environment in which to be creative or productive. Last month the entire division was reorganized, and I got a role similar to what I was doing at MS 5 years ago, though at a more senior level.
I'm working harder now than I ever did at MS (and I usually didn't leave until 9/10 pm when I was at the 'soft) because there are simply fewer people around to do the work that has to get done, but in the grand scheme of things I've been exceptionally fortunate to have survived three rounds of layoffs and be more or less the last man standing. At the same time, for all Motorola's faults, I've been treated far better than I was at MS, and this at a time when Moto has been in an extremely tough spot.
It's a terrible, terrible thing to watch everyone around you get laid off or decide to leave, and in the process lose your team. While it will be uncomfortable for the 'lucky' folks at MS who don't get laid off, it will be even worse for those who get cut. Having spent time with a lot of folks over the last two years who were getting laid off, I can attest to the terror that many devs/pm/pdms/etc. are facing in trying to find *anything* in the current job market.
Not a Microsoft employee, but just some outside observations...
I'm always wondering why you guys dedicate resources to building things that simply don't make you any money. Take IE for instance. Why bother developing and supporting your own browser when there are very viable open source alternatives such as Firefox and Chrome.
Just one example.
>>Anyone advocating an across the board compensation cut (no bonuses, 10% salary cut, etc.) in favor of actual attrition, is an idiot.
+5 (after deduction of 5 for language)
>>Bzzzt. Wrong answer. What MS needs to do is be better at managing its acquisitions, using them to bring in much needed talent and external experience and perspective.
+10
what is wrong with people suggesting socialistic solution?? dudes, if you are clinging more to the job than the job is to you chances are that you are deadwood.
suggesting peanut buttering of cuts (salary, bonus, benefits) is the first step towards irrelevance.
so painful as it may be, if layoff / RIF has to happen, it has to happen with people without whom the org would be in better shape. one needs a sugical scalpel and not a hatchet for cutting headcount. rewarding top performers disproportionately is the only way to have the brilliant minority who ends up pulling the org.
Partner and exec compensation should be reduced to near zero before they start layoffs.
They've been making fortunes off the backs of the rest of us jerks for too long. They can afford to give skip their salary/stock options for a year.
Didn't the partner program numbers posted here say they alone got US$1B ?
Or maybe they could convert to purely stock-based compensation?
Now that I woke up from that dream, let's talk about some other ideas suggested here...
contractors - They have tens of thousands of contractors. Wouldn't we eliminate most of those positions before layoffs? We will never go back to permatemps...
Prime card - no big loss there, let's toss it
proclub - I agree that we should have to pay more for this if we want it
Getting rid of bottom 10% - I'd like to hear a good way to spin this that makes wall street
and employees happy.
medical benefits - we should bear more cost here too. $5/10/20 copays for prescriptions
would still be very reasonable, and only the people using the services would have to pay.
Cutting/selling product groups - I'd love to see this, but I don't think Steve would let
it happen.
IT group - They have dozens and dozens of useless programs/projects underway. Go look at the internal IT site to see. A lot of fat can be trimmed, and we won't even notice a difference.
Windows - I work in Windows, and I know that we still have too many people in some places. Probably not enough in others. Things are getting better, but it's not perfect yet. Hopefully they can just move people around here and not lay anyone off.
I hope SteveB and the other upper mgt people take the lead of the auto industry and work for $1/year until things are better.
If MS is truly losing money, doesn't that mean the partner profit sharing will be 0?
And, this is personal. I hope the VP Todd Warren gets RIF'd. He screwed up Windows Mobile 7 so bad that he was moved and SteveB put Terry Myerson in his place. It's amazing to see how quickly Terry is turning things around. Todd needs to be shown the door.
I don't see anything here specific to MBS/Dynamics. Are they immune from all this? Is "the boring place no one wants to be" suddenly "the boring place it's safe to be"?
I don't see anything here specific to MBS/Dynamics. Are they immune from all this? Is "the boring place no one wants to be" suddenly "the boring place it's safe to be"?
You are in office and will take 20% haircut.
HR will get cut. HR for HR will manage the cut.
The execs will have their pay cut. It is just not as large as the others. L68's new lower watermark is 400K/year. SteveB is likely to switch to cash compensation for partners.
I hope SteveB and the other upper mgt people take the lead of the auto industry and work for $1/year until things are better.
> Emulate Jobs one thing if not in all.
When I went back to MS in 2005 after several years away (and a full prior career), a very insightful and connected person, commenting on the "new and improved" review model said:
"oh no, it's just a way to lay off people that get in the way of management bonuses. So this year they will sack the 6000 people trying hardest to do the right thing, and next year they will sack the 6000 people trying to do the right thing, and by the year after that, there won't be anyone left trying to do the right thing".
He's a cynic. I took it with a grain of salt, didn't fit my experience with the company or the industry.
That first year, I was confused because he appeared to be right. People I'd known a long time, very high performers and total right thinkers - just disappeared. Often not at review time. They were usually confused and embarrassed, said things like "I don't know. I pointed out that something was wrong and the next thing I saw was a security guard telling me to clean out my desk."
I asked about things like PIPs and HR involvements and all indicators pointed to those disappearing in 2005. Any single manager who wants you gone, can fire you for any reason he or she can make up.
I didn't want to believe them but then I saw it happen right next door - and was very familiar with the sequence of events leading up to it. Manager wanted a bonus and promotion for selling a BAD high$$ contract.
I tried to be a little bit smarter and compiled enough paperwork to keep HR and legal busy for a while before filing a complaint ... which, in the end, only served their purpose by extending my non-compete past the embarrassing implosion of another BAD high$$ contract. (which everyone involved was promoted for).
Now the funny thing is that 2008 is that fabled "year after that" my old friend referred to(no one left really trying to do the right thing) so it will be very interesting to see how this all turns out.
"I'm always wondering why you guys dedicate resources to building things that simply don't make you any money."
Defects in third party stuff that goes out the door in your product under your name magically becomes all your fault in the eyes of the uninformed public. Even telling them the truth of the matter makes no difference.
I cannot believe there are some of you recommending a voluntary layoff. That's a disaster on so many levels.
The basic rules of a layoff are simple:
- Cut once. Everyone will be pre-occupied and distracted if this is just round 1 of N. Rip the bandaid off and let everyone concentrate when it's over.
- Cut deep. Do the math and figure out how much you can live without. And then tack on another 3% for good measure. This will give you headroom to deal with worse financial news. And it will do remarkable things to help you focus on what's important.
That's it. Although, for MSFT I guess I would add:
- Don't be top-heavy. You need rowers not a bunch of guys yelling "stroke" out of sync cuz they're all bosses to the 2 poor bastards with oars.
- Kill the fiefdoms. Find your good managers. Find your bad managers. Make one king and combine their fiefdoms. If you're lucky, everyone gets their shit togther. If you're mildly lucky, that results in more "good attrition" in the middle. If you're not lucky, it forces your good manager to give more hard messages.
- Restructure. Here's your REAL chance to eliminting the deep org charts and making them wide. Make your Leads responsible for 75% Manager/25% IC cuz they have 10 reports. Make your Manager level responsible for at least 50 people. Make your Directors responsible for at least 150. Or get rid of an entire band and move those numbers down. That works, too. But cut the crap with Leads that have 1-2 reports. They should have 5 on the LOW END.
I very highly doubt there will be any layoffs. Even if one gets laid off, having Microsoft experience on your resume will help you land your next job in a few weeks.
One thing is certain though - the real estate market here will tank if anything close to 10% layoffs happen.
I haven't read all of this, but I think people are going off the deep end here.
1) Microsoft is already cutting back expenses, for example travel and christmas parties. Last year I got a Zune, this year a thank you email. The total cutbacks is ~$500M. It is likely there will be more expense cutting as the first round was mostly painless.
2) Layoffs are not needed. Microsoft has greatly slowed hiring and with normal attrition the headcount should start slowly drifting down. Then when reviews roll around, the 10% group will probably be given more reasons to leave. You could see well more than a 5% natural decline in headcount. That is also far cheaper than laying people off.
3) Microsoft's business are strong, it isn't a question of declining business, right now it is a question of declining growth. Even with much lower growth profits will soar with the expense cutting, lack of headcount growth.
4) Don't forget about the impacts of the ongoing share buybacks.
Here is my story. Started at MS in 1999 as a L59. Helped start a new business that have grown into $250/year in revenue. Got promoted several times (left as a L64). As team got bigger it merged in with a moribund office team. When we merged I got a new boss. She had been at Microsoft for 10 years (came in as a L65) and was never promoted once. They have her the job instead of me because she was "senior".
So I went to Longhorn to work on the windows client team. Worst management I ever saw. Totally inept. My manager felt I was promoted too quickly in my previous group so felt it was his mission in life to dump some 3.0 and 3.5s on me (my review average for the previous 4 years was over 4.0 with a few 4.5s). After 2 years of getting sand kicked in my face despite working insane hours I left.
Went to Amazon for a year where I learned that there was life outside MS. I become refreshed. Started my own company. Raised two rounds of VC financing. We're bringing in revenue hand over fist right now and on the verge of profitability. Many local CEOs accept me as their peer and seem to think I'm pretty good at this CEO job.
Over the past few years, I've hired close to 35 people for my company. Although I've interviewed many MS people, I found they lacked real world skills, didn't have the right mindset, had a sense on entitlement because they worked at MS. Now, my executive team will rarely bother interviewing a Microsoft candidate.
The lesson here is that the skills people develop at MS after being on the job for more than 2-3 years had to do with playing the internal MS game. Those skills are not valued elsewhere.
I suggest folks wake up and realize that MS has become a place where smart people atrophy. Go start your own company. Go work for a smaller company that actually has to hunt for a living. Yes, there is more risk but the skills you develop are more valuable in the market. Also, you wake up every day feeling like you can make a big impact.
My only regret is not leaving MS sooner. Now I get resumes from PUMs looking to work for me, even a few MS VPs have expressed interest, but I find they lack the skills to make a difference. They have become mindless corporate drones skilled in nothing more than internal politics. Don't let it happen to you.
Any news regarding contractor/vendor?
And I wonder how many contractors/vendors MSFT have? some news say 40,000 and some others say 60,000 or even more
The couple of dorks who suggest killing Ray Ozzie's organization clearly don't get it. Is Microsoft going to be a viable company in 10 years if we're still trying to live on Office/Windows and SQL Server? I don't think so. To survive the company needs to think differently. I think Ray Ozzie brings that. Is he the savior? Nope. Saviors are for church. But he does have the ability to shake up the old-boys network at Microsoft which is sorely in need of it. If he's able to do with services what Bill etal did with "Web-a-fying" our products in the mid to late 90's then that's a step in the right direction. If he's able to build the platform of the future in Azure then the company will be set for another 20-30 years.
In 1999, Microsoft stock surpassed $58 and market cap rose above 600 billion. Today, the cap is around 170 billion, and looking at the flat growth since the apogee of Office 97 and Windows 2000, one has to wonder why a RIF has taken this long even if it does.
For those of you who hate Ozzie, you might consider the value of his suggestion that Microsoft needs to reverse down to startup mode. I was listening to Guy Kawasaki's spiel on "every company a startup", one might glean that Ozzie has been listening too.
But reading also the dichotomy of Mini's comments in "Second" where he talks almost mindlessly about 10%ers and 70%ers as if people actually really do fit into those classifications (they don't, trust me) and "Third" where he tries to redeem his empty comments suggesting that it is insensitive to hire people and then fire them (duh) one can quickly realize the problem at Microsoft is exactly that: lost in the bureaucracy, dead in the water, and stagnant as a dead fish for ten straight years.
Companies don't do great things, people do who happen to work for a company sometimes. 10%ers if they exist only because some idiot manager decides they are such also do great things. Microsoft can't get live to work, couldn't see Vista for the Forest. It had no clue what was needed in a browser, couldn't break away from a stagnant Office platform, and had no idea how to make a really great music player. Or was it a phone or was it a reliable gaming platform, or. All these things because as a company (and I do NOT work for Microsoft or its consulting army) it was being managed by lawyers, HR wonks, distracted and disinterested executive partners.
Even Mini is guilty of not getting it. Wouldn't know how to manage a start-up if it bit him in the ass. Koolaid drinker, company man. You want to fix Microsoft? You have to dismantle the politburo that has defined the company for the last ten years. That would be huge, a cultural pink slip bloodbath of biblical proportions. But reading the insipid Mini between the lines, that is not going to happen. It will be an orderly, useless, meaningless RIF, and when you are done, it will fill awful, and privately you will know it was really about protecting yourselves in the end.
>"2) Layoffs are not needed."
under perform since 1999
Day's Range: 18.89 - 19.29
52wk Range: 17.50 - 36.72
Volume: 58,577,826
Avg Vol (3m): 105,645,000
Market Cap: 170.62B
P/E (ttm): 10.14
EPS (ttm): 1.89
Div & Yield: 0.52 (2.70%)
always have a plan B
I asked about things like PIPs and HR involvements and all indicators pointed to those disappearing in 2005. Any single manager who wants you gone, can fire you for any reason he or she can make up.
I am working through this process now (as a manager), and I can guarantee you that it is 100% false. There is still a lot of process involved to fire someone for performance reasons. IF the layoff rumors are true (and I don't believe them), at least this solves one of my problems :)
1) Microsoft is already cutting back expenses, for example travel and christmas parties. Last year I got a Zune, this year a thank you email.
I've been at Microsoft for 8 years, and I've never even gotten a card.
Speaking of Christmas, I was surprised to see what Googlers normally get during the holidays vs. what they got this year.
http://gizmodo.com/5115708/google-to-employees-no-christmas-bonus-heres-a-g1-instead
This is a false rumor. Haven't heard anything about it. FTE's have nothing to worry about at all. Contractor's need to be very worried though.
Take rumors with a grain of salt. Yes, the economy's bad. Yes, PC sales are slowing. Yes, there's a chance we'll miss guidance. This isn't the first time these three things have happened when MSFT has been around. How did we react then?
Also, note that there have been rumors on this blog that have never come to be, despite the hype in the comments, and no one seems to remember those. For example, remember how some were so excited that they would receive something as part of a "farewell Bill" at or around his last company meeting (bonus, etc.)? That never happened, yet I recall several comments supporting that rumor. Hmm...
If there are layoffs or RIFs or whatever you want to call them, they will be ineffective because Microsoft is unbelievably bad at introspection.
I spent a number of years at Microsoft. At one point I joined a group that had just shipped the latest version of its product. We started working on the next one with the expectation that it was going to be a two year job. Before you know it the two years are up. No problem, we'll do it in three years. Well, we end up at the five year mark and it's still not done. Marketing's already announced that thing as "Microsoft Widget 200x" and calendar year 200x is coming to an end so we give it one last push and ship that thing right before the end of the year. The product ends up being pretty good, and doing well for the company financially speaking, yet when I look back at those 5 years I see a big problems.
In all the reviews I had during that time I never once saw feedback that related directly to the problems we were experiencing with the development of our product. Nothing about ability to plan or to meet deadlines. Lots of blah blah about intangibles like "visibility".
The problem of Microsoft is that most of the managers there practice cargo-cult business. They see what managers at other big corps do, and they do the same, with little or no understanding of the whys. That's what the whole review process is, just an attempt to be like the big boys. Monkey see, monkey do (and may I add monkey get in trouble too).
As for me, I ended up leaving. In my current company, I am judged according to relevant and objective metrics (deadline met, product shipped) and I get feedback that I can use.
Do you know who was killing Microsoft economically from past several years- think think think? Being one of the 65 level in this organization and spending most of my career here - I can tell you that this group was living lavish life from past many years (thank god – we have some economic crisis now and people are asking some tough questions from the managers here). I know many of you have already guessed and you are right - this group is called "GFS - Global Foundation Service"
________________________________
Where do you think 1 billion+ users are going to have data stored at? air?
All the hardware purchased is actually racked in data centers and is used to accomodate users, why because growth rates are in double digits quarterly?... you have absolutely no clue about what GFS does.
Without GFS you might as well take the entire market share and had it off to the big G...
For education purposes look up windows live Wave 3 and Wave 4 initiates so perhaps you can get a clue and not resort to assinine comments.
Folks, I've been working with (in SIs etc) Microsoft for 15 years.
I've never seen Microsoft so bloated.
In the last 3-4 years I've seen so many non-customer, non-product, non-partner jobs created.
It's not good to fire people, but it's not good to work in a company with so much bloat.
A 10% reduction - IF done responsibly - is a good start.
But I agree, cut deep and cut once - otherwise people get even more internally focussed.
Painful, but needed.
>The couple of dorks who suggest killing Ray Ozzie's organization clearly don't get it. Is Microsoft going to be a viable company in 10 years if we're still trying to live on Office/Windows and SQL Server?
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Look at windows live id. Azure is not yet functional. Is this the future of Microsoft? Ozzie has a large group that is a money pit. MSN 2.0 in the making.
This is a false rumor. Haven't heard anything about it. FTE's have nothing to worry about at all. Contractor's need to be very worried though.
Contractors do the work FTE do not want to do or are incapable of doing(most likely the latter). MS would not ship anything without them.
under perform since 1999
Day's Range: 18.89 - 19.29
52wk Range: 17.50 - 36.72
-----------------------------------
Layoff is a hatchet. Microsoft needs a scalpel to surgically remove waste.
Q1 FY09 revenue/income(loss) by segment:
Client: 4,2 3,2
Server: 3,4 1,2
online: .8 (.5)
MBD: 4,9 3,3
EDD: 1,8 .17
Unalloc (0.01 )
HR,fin,legal (1,4)
Cash: 9,0
Short term investment: 11,7
Debt 2,0
Microsoft lost its "Weenies & Beans" attitude years ago and needs to regain it. The companies owners, shareholders, don't need the company spending money for all the feel-good group meetings and expensive air fares/hotels/etc.
To the person who brought up Live Wave 3/4. The latest Live release is great and needs to be supported. At the same time, the org needs to be lean with an eye on how it makes revenue or ties in revenue for other groups. With good marketing, it could rehabilitate Microsoft after our Vista fiasco. (Not saying Vista is bad, but many perceive it as bad).
This comment by anonymous:
"The lesson here is that the skills people develop at MS after being on the job for more than 2-3 years had to do with playing the internal MS game. Those skills are not valued elsewhere."
...is spot on. It's part of the un-reality embedded within MS, along with 'failure doesn't matter' (hey we learned a lot) and 'money doesn't matter' (we're building mindshare).
Trust me when you finally get back on the outside, people look at you like you're from another planet. In the real world companies need to get the job done and make money to survive.
"2) Layoffs are not needed."
Let me modify this a bit ...
Layoffs of FTE's are not ended. 10% will be given "guidence' on how to leave and contractors will be axed as needed. The jobs will because a little harder, but just a little and Microsoft expenses will stay in line.
Where I work, we are only allowed to backfill with contractors. This is to build a buffer of who to let go as needed.
"Look at windows live id. Azure is not yet functional. Is this the future of Microsoft?"
We need investment in this area with a different management. This org looks like a bloated balloon today full of hot air. We need a leaner and meaner machine.
I wholeheartedly agree with the poster who said that skills learned at MS are not valuable in the real world. When I left MS, I found my resume would get me the interview but that my skills were very MS specific and often not relevant to what they needed. Finally I found a good position (making more money) but basically had to re-learn a bunch of things. I'm much happier now and can honestly say MS would be my last resort if I were job seeking again. I can't imagine a more miserable place to work.
MS will not do straight layoff. It will re-org, and cut groups/projects. Say 2000 FTE are given 4 weeks to land a new job within MS, I bet 1500 will find nothing and will be forced to leave.
So no layoff, let's call it "reorg-off" and MS can even save layoff package. LOL.
A few comments here suggest a 10% salary cut.
You need to remember that a 10% salary cut is much less than a 10% reduction in costs.
I don't know the actual number, but a few years ago I heard that (all told) an employee costs MS $500k per year. If it's anywhere near that, then a 10% salary cut does almost nothing.
It's also odd how we assume that a 10% reduction in costs matters.
e.g. if it's "to show Wall Street we're serious", then it seems like a token gesture.
I've heard two different kinds of rumors about upcoming cuts from several discipline manager level people. One rumor is that we're cutting groups, the other is that we're cutting low performers. This means that people at the discipline manager level know something is coming, but they don't know the details yet. I think if the plan were to cut low performers across the board early next year, discipline managers would already need to be involved in the decision making process, and thus there wouldn't be conflicting rumors. So discipline managers obviously aren't involved, which means the decision making is happening at a higher level. Probably VP and above. This suggests cuts at the organizational boundary vs the personnel performance boundary. But anything could happen. What a horrible time for people to get layed off, RIF'd, or whatever you want to call it.
So no layoff, let's call it "reorg-off" and MS can even save layoff package. LOL.
Nonsense. As with all layoffs till date, this is reported as a layoff and people have the option of taking severance or finding a job at MS. Long timers often prefer taking severance and then coming back to MS after some time.
>Ozzie has a large group that is a money pit. MSN 2.0 in the making.
MSN is a money maker, search is the money pit. Ozzie's group is Search 2.0
"MS will not do straight layoff. It will re-org, and cut groups/projects. Say 2000 FTE are given 4 weeks to land a new job within MS, I bet 1500 will find nothing and will be forced to leave.
So no layoff, let's call it "reorg-off" and MS can even save layoff package. LOL."
That's called a layoff, chief.
I'm much happier now and can honestly say MS would be my last resort if I were job seeking again. I can't imagine a more miserable place to work.
Then what we have here is a failure of imagination.
Microsoft has plenty of problems -- but if you think it's at the bottom of the heap of places to work you're either inexcusably naive or just spewing sour grapes.
As for relevance of skills -- I left MS 4 years ago after 8 years and worked in 2 different companies as a senior UX designer. Not only did I get offers whenever I interviewed, but I'd rank my skills as generally higher than people I encountered in the wild.
I did very well on the outside but returned to MS last year and couldn't be happier.
Your experience might be completely different, but Microsoft is certainly not the Worst Place in the World.
http://www.thestreet.com/newsanalysis/optionsfutures/10454749.html
wow..... "Oppenheimer says it would be a buyer of the stock at current levels, adding that a 10% headcount reduction at the software giant would offset $3."
Wall street is already putting pressure to have the cuts. I'm almost certain that the layoffs are going to happen.
Massive layoffs seem unlikely as we have a good amt of cash which we can thank Yahoo for.
I wouldn't want to see anyone out of a job, and am personally a big supported of work-life balance. That being said I have personally been in orgs during my three years at MSFT where I have seen what I will call coasters. Guys that worked 9 to 5 and got very little work done. As a matter of fact if you talk to some of them, they would just admit it. I don't have a big problem seeing folks like this getting shown the front door.
In terms of general cut backs throughout the company I think this is a really good thing. Microsoft weathering the storm will force us to tighten out belt and become a more efficient and stable company going forward.
Maybe this is just the kind of the rocking of the boat we need.
I just want to touch on one comment about skill relevance. Microsoft is a big place, a really big place. The experience you have in one part of the company is entirely different than in another. I have worked in 3 orgs, each one better than the other. In one, the experience was really poor and I felt like I WAS losing industry relevance. In the other two, it has been just awesome and I have no complaints. And no I have not work at Microsoft my entire career. I had 10 years in various startups and enterprises prior.
Wworking at Microsoft is more than just the role you do day to day. That may sound clicheish but it's true. There are a tremendous amt of opportunities beyond the job that you can take advantage of to grow even if it is not in your role. For example internal lists like Agile email aliases, Architecture, etc, as well as many programs.
My takeaway in the time I have been there is that survival at Microsoft is going where you want to be. If you are not in an org where you are happy, then you can generally get to one that is, if you are willing to look. But you have to do it, it's generally not going to find you. :D
The ONE exception being that in these rought times, most of the other orgs are not hiring.
So no layoff, let's call it "reorg-off" and MS can even save layoff package. LOL.
Nonsense. As with all layoffs till date, this is reported as a layoff and people have the option of taking severance or finding a job at MS. Long timers often prefer taking severance and then coming back to MS after some time.
Umm. Under normal circumstances, that would make sense. Under current circumstances, giving people the "option" of finding another job at MS is almost exactly the same as showing them the door immediately. Know any groups that are hiring any significant number of internals right now? Or will they open things back up and some groups will actually hire to absorb all the groups that RIF people?
I guess none of us really know (and/or the VPs who read Mini certainly aren't going to make any announcements here).
Wait, wait, wait....
>"Wall street is already putting pressure to have the cuts. I'm almost certain that the layoffs are going to happen."
Considering the percentage of stock owned internally (about 13% last time I checked) that statement is probably correct.
The problem with layoffs vs. other cutbacks is that layoffs will affect mostly underperformers, while cutting stuff like healthcare copay or other perks will have negative effect on high performers as well, and there are only so many cutbacks you can inflict on them before the high performers get pissed and leave as well.
Even worse idea is imho a generous "voluntary termination buyoff" or something like that - the high performers who know they can find a job will leave while the underperformers who know they'd have trouble finding job elsewhere will do anything to keep their MS jobs. Things like global paycuts will again result in high performers leaving - in short term, spending less on salaries is good, but in the long term, losing high performers is bad.
1) It is time to "dump" businesses and products that consistently have lost $$$ (usually billions). Send a message by shutting down www.msn.com (I mean really shut down all of the servers - no one will miss it).
2) Drop all non-revenue goals/metrics except for customer-satisfication.
3) Everyone then needs to have a role that aligns to: a profitable business/product or a revenue goal.
To the poster claiming that all said and done, MSFT FTEs cost the company $500k, that is bunk.
If that is the case, then our employees cost us $50 billion dollars per year.
Yup, TheStreet.com article means this is a done deal. This may be SteveB's only chance to increase the stock price during his time here.
If we are going to have layoff's, let's start with the executive suite. In a word, accountability.
Let's examine what has transpired since Steve has taken over the top job. Oh wait, that would require an honest assessment by the BOD, or more specifically by a guilt ridden BillG who continues to delude himself with the notion he owes Steve for the long-term loyalty.
So forget about it, never happen. Best thing that could happen, RIF the top 5,000 executives -- starting with Steve. They are the ones that should be accountable for taking the company from $58 per share, split adjusted, to the lowly worm $19/share. Today, Apple has 75% of the market cap of Microsoft, and they've done that without the help of the FTC handing them a Monopoly, as Microsoft was granted back at the beginning of this industry.
I left MSFT as a L64 Software Design Engineer this last June after 8 years with the company, 8 of the most disappointing years I've every seen and that's saying a lot, I left a small software company owned by Enron in 2000 to join Microsoft.
Pathetic
... Apple has 75% of the market cap of Microsoft...
hmmm, actually Apple has not even close to half of Microsoft's market cap...77B vs 171B
>> layoffs will affect mostly underperformers
Immediately, yes. Long term - there's no way back after mass layoffs. Microsoft will lose the status of a company that never had them. Since some good folks will inevitably be laid off as well, morale will be in the shitter.
As economic conditions worsen and more and more people are laid off, a lot of the "good" folks will begin to think they could be next, and since they have their options wide open (even now), they will simply leave. Thus you will end up with a higher concentration of people who "know how to play the game" and little else.
"2) Drop all non-revenue goals/metrics except for customer-satisfication.
3) Everyone then needs to have a role that aligns to: a profitable business/product or a revenue goal."
Are you saying you will shut down some orgs like, MS Research too? This is something from a tongue of a sales person who only want to stay in MS for one year and leave with bonus...
If it really comes, it should start from the top first, "Trim out those who have continued to receive bad MS Poll numbers and reviews". Then review all the business and orgs and trim out those which do not aligned with long term business.
Layoffs are happening. Its sad but a harsh fact. Apart from 10%ers, expect reorgs and axing of sluggish higher middle and senior management level.
"This time MSFT will axe stagnant management who have little foresight, leadership qualities and vision, and over time have simply learnt how to play the politics game and keep themselves afloat."
Looks like a done deal
http://blog.seattlepi.nwsource.com/microsoft/archives/157832.asp
The news is in. All the money making groups cut 10% of the work force. The money losing groups hires.
Mini what does this mean? I'm a new hire in Search scheduled to start in a couple of months. Does this mean Microsoft will not honor the contract I signed and I'd be out of a job after Jan 15?
While a Layoff is nothing any of us look forward to, cutbacks are inevitable. One of my friends at Fedex filled me in on the plan their executives have come up with and I'd have to say I was impressed.
The CEO is taking a 20% paycut, other Senior Level VPs and Uppermanagement are taking a 10-15%pay cut, while freezing raises for all individual contributors.
They are freezing the matching on their 401K program for 1 year too. These cost saving effots are keeping them from laying off any employees.
Knowing the unrealistic bonuses our level 68+ folks recieve, I'd like to see a similiar program implemented.
One of the "rumors" I've heard around the watercooler is that we are looking at a 10% layoff, and part of those heads will come from the open headcount that is out there.
I'm on one of the teams that are still caught in the middle of a re-org that keeps getting postponed and our Director has told his direct reports to start looking for other positions. Outside of that, nothing has funneled down to the individual teams.
Frankly, I am looking forward to January 15th or 22nd, when ever an announcement is finally made. Good, bad or indifferent, at least we will know our futures and can move forward.
>> Even if one gets laid off, having Microsoft experience on your resume will help you land your next job in a few weeks.
Sorry, but no longer true in marketing, at least. To quote a well-placed executive in another local company, "I worry about hiring anyone who has been at Microsoft over 8 years. At that point, all they know how to do is direct agencies, manage upward, and create powerpoint presentations. I'd like to actually see them do something themselves, in a timely manner, and with accountability."
I am a former Microsoft marketer of 10+ years. My advice to all of you - do 5-7 years, gain great experience, demonstrate success, move on. The politics, baggage, and bad habits just aren't worth it any more, especially in a hyper-competitive marketplace. Don't EVER count on a long-term tenure at Microsoft to make you automatically hireable any more.
There are layoffs coming, don't ignore the signs. Between the economy, poor holiday sales, and Wall Street, it is a trifecta of issues that Micorosft must address to appear to stay "competitive."
I, like others, only hope that Executive Management (level 68+) take a long hard look at 65-67's and do some deep cuts there too. Way too many Directors, and in many cases, Directors reporting to Directors. Absurd.
Do new hires automatically qualify for the U10%?
Any guess for Sales/Marketing/Service group?
Well, Mini, now that your column has hit the newswires and analysts are putting on the heat, you are certainly under the microscope. If you are wrong, it's gonna be a hit to you cred (although 10% of the employees would be relived).
If there is a layoff.....
If H1B visas are given under a premise that there is not enough skilled citizen workforce to satisfy demand, what are the legalities when a layoff occurs?
Do H1Bs go first? Do US citizens get preference in the 'four weeks and your out' internal job hunts? Are the rules different when doing a RIF vs a layoff?
Inquiring minds want to know....
"I left MSFT as a L64 Software Design Engineer this last June after 8 years with the company, 8 of the most disappointing years I've every seen and that's saying a lot, I left a small software company owned by Enron in 2000 to join Microsoft."
-- Come on dude! If it was that disappointing, why did you work for 8 years. The last 8 years have seen some tremendous opportunities in software, so I find it hard to believe what you say.
-- As for LayOffs, come on again! Layoffs is not going to solve anything! By creating these kinds of rumors and uncertainity, you risk losing talented people to other companies. (I still see plenty of job openings on Monster and elsewhere).
--Man, this blog is a pool of negativity where large number of mosquitoes thrive.
Recently I had a very spirited discussion with a coworker about how awesome it would be if they rif'd our entire org. We are a pie in the sky project in E&D that has blown close to 1B mainly due to a critical lack of leadership. A nice fat severance package would be just the ticket.
I'd take it in a heartbeat.
For the curious: level 64, exceeded/20% for the past 3 years.
See ya! I've already got my next job lined up. Think about it like a double signing bonus! Wow I can't believe how excited I am getting.
Guys - I don't believe how a simple rumor gets so much attention.
MS will do their usual reorg and find a position in 6 weeks. Simply put it MS is repurposing its resources.
I seriously doubt any executive will feel any pinch from this, or any future cost-cutting measure. That's not the Microsoft way. Execs run the company, their politics matter more than their strategies, more than the stock price.
Microsoft would have to crash and burn (and then get a new CEO) before any of that changes. There's not going to be any social justice coming out of this.
And if you're worried about your job, well, I hope your upper manager is popular.
"For chistsake, split the co apart willya and let all the brilliant ideas sink or swim within they're own merits vs forcing integration across BGs."
Funny, didn't the US DOJ mention something along these lines about 8 or 9 years ago? A former co-worker mentioned that he was glad that Microsoft wasn't broken up because the mini-Microsofts might have even become more powerful if they were forced to live on their own merits, rather than piggybacking on the success of Office and Windows.
I believe it was Steve Wozniak who mentioned that back in the 1970s, HP did cut 10% of everyone's pay so they didn't have to lay people off, BUT that also meant that people got to take every other Friday off, so they were working 9 days every two weeks.
Considering the cash flow that Microsoft is bringing in, they are one of the few companies that don't necessarily need to start laying off people, but this wouldn't be unusual in this day -- Look at Adobe and AT&T. They are both pulling in good money, and they both have recently let people go.
Any idea if the layoffs will target new hires or if the "10%-ers" include newly hired employees by default (due to company policies/rules)?
I JUST started at MSFT as a developer, moving all the way from Florida to Puget Sound...ugh.
Live Search has problems too. I think these rumors feel more real than ever is because the horrible economic situation we are in.
However, I am someone who firmly believes "Only The Paranoid Survive" I joined MS 1.5 years ago in Live Search. I am not quite sure how Live Search is going to fare in this weather.
I am doing resume fix up, contacting old co workers, doing whatever I can so in the end, nothing will be a surprise.
I don't agree with pay cut all across the boards.
In tough time, people still want recognition.
Working at MS for almost 1.5 years, started last year in July. My boss and I have discussed the idea with moving me up one level by mid year review.
He told me that he has discussed my promotion with my skip managers, other leads and there seemed to be no problem.
Normally, I would take his word for it, However, given the economic situation we are in, I am not too sure.
I agree with cutting back pay raises and bonus for people who are Lvl65+, so they can promote more ICs with smaller increase. My lead got promoted this Nov with a 6% increase while my friend got promoted to lvl 61 at the same time with just a little over 2%.
I'd be happy even if my pay increase is only $1000. I want the recognition that comes with the promotion. That is what keeps me going. And to me, I believe people need to be leveled at the level they are performing at.
This time MSFT will axe stagnant management who have little foresight, leadership qualities and vision, and over time have simply learnt how to play the politics game and keep themselves afloat
-- Ain't gonna happen. The little feller will hold the bag.
As for LayOffs, come on again! Layoffs is not going to solve anything!
--
It will solve a few things.
Incompetency of management will be apparent. It is far worse than Detroit!
Good people will start to look at alternatives to earn their living.
I've been working at Microsoft for the last 9 years.
Every group I've worked at could be canned immediately without any problems.
If you think about it, except for deep core Windows and Office everything else could be easily canned or sold out. Sharepoint? Spin it out. SQL Server? Sell. Azure? Make it independent. Live Search? Sell it to Yahoo or kill it.
Microsoft can be a provider of Windows and Office platform. Maybe even 2 companies: Windows in one side, Office in another. All the rest (including me): out.
Anything less than this is an aspirine for pancreatic cancer.
Layoff rumors. Wide separation of salary between management and line workers. Threats to cut benefits. Sounds like an environment ripe for a union!
Pause coming: I'll be hitting the two-day pause button here for the holidays in a few hours.
"Self-fulfilling prophecy"
A self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true.
See Mini-Microsoft.
Instead of panicing, let's look at this as an opportunity. Some companies are still making money, Microsoft has a reasonable cash stash so let's prioritize, focus and go get some market share now and where we believe there will be opportunity a few years down the road.
We can all panic and yes, we should all be prepared, but my experience is you have to embrace the situation you're in and MOVE FORWARD or be crushed by the rip tide after the wave.
So... Would love to see a discussion about what markets and customers can we get moving forward? How do we sincerely go get those next 1B PC sockets with a variety of MS solution stack? Where is the server computing growth and what can we sell there now and build going forward? Entertainment and devices could be a counter-recession play if we did it right (think we need a leadership change there though) as people will spend some money on entertainment for their home instead of going out as much or taking a larger vacation - so what can we do there?
Research - got to have it long term, but no one really knows how any decisions are made over there. It's a black box which in this environment looks like a money abyss. So come above board internally on this (MOVE FORWARD) or get ready to sink.
I am worried about the ability of our senior managers. Many people in this category (and yes, I am in this category) have never had to manage successfully through an economic downturn, never had to stake their career on prioritization and hard trade-offs, never had to really really see all the way through the execution of their decisions and manage all the consequences both good and bad. That is what makes me nervous. Some of us who have not spent our whole career at MSFT have done this successfully but the old guard wants no part of listening to that experience. It's the senior leadership equivalent of NIH and that is dangerous. Heat from Wall Street and the BOD can alleviate some of this and grass roots efforts help as well.
So I choose to look at things this way with my org. We know what the market forecasts look like, we know what things internally look like. Ok. MOVE FORWARD. Prioritize, focus and drive for results. Be proud of what you do as well as what you choose not to do. Think about where we want to be when the economy starts to turn around and MOVE FORWARD TOWARD THAT GOAL.
I do believe as a company we can do this. It takes guts and commitment, but heck, I'm in!! Anyone with me?
GUYS -- This is just a RUMOR. I can ASSURE you all no layoffs are happening atleast in January.
MS is just too FAT, cutting is good. You can find tons of GMs reports to GM and GM, layers and layers of Directors to Directors. All are "corrupted" behavior, you know your buddy you become a GM. No business related experience GM, but that is ok, because you know XYZ. You can find VP with 2 direct report - one is his admin. Sigh. Managers with 2 direct reports, or even 1. When you challenge them, you get slamed, because you peel off the buddy buddy system, it hurst. Non sales related GM got $700K pay package. What is this? But I can imagine, the cut will not be cutting these people as they are in power. The cut will cut the useful people again.
I love MS but I smell death... it seems dying due to the current not quite useful management...
Happy Holidays.
"Layoff rumors. Wide separation of salary between management and line workers. Threats to cut benefits. Sounds like an environment ripe for a union!"
LOL! How many times over the years has this nonsense bubbled-up?
Let's have just a tiny reality check, shall we?
1. There is a huge disparity between management and line-worker pay -- correct. That said, there are literally thousands of competitive opportunities outside of Microsoft if you decide you don't like the pay structure.
Unions are only necessary when there is no reasonable opportunity to take your skills elsewhere on the open market, thereby giving your employer an unreasonable amount of leverage to keep your wages low. Microsoft has no such leverage, as evidenced by the constant stream of people posting here about the gazillion opportunities waiting for anyone who chooses to leave the hive.
2. Benefits: Microsoft could cut quite a bit of our benefits and we'd still be head-and-shoulders above many other companies. Our benefits remain among the best in the business.
I really want to baby shake anyone stupid enough to whine about unionizing our employee base. Please take the time to learn why unions exist before spouting random nonsense, thanks.
idea of tracking interviewer responses and loops to past evaluations vs candidate performance
I'd made this suggestion long ago, even tried pushing the feedback up the HR chain. I got a few shrugs..
>>We are a pie in the sky project in E&D that has blown close to 1B mainly due to a critical lack of leadership.
Poster, if you are so excited about leaving, then name the group you're in and put some cred behind your statement.
Surface?
I JUST started at MSFT as a developer, moving all the way from Florida to Puget Sound
>
New hire is generally at the bottom of the stack. Send mail to your HR generalist to fire the senior people.
>I do believe as a company we can do this. It takes guts and commitment, but heck, I'm in!! Anyone with me?
How much you got paid? A few million dollars/year?
>>GUYS -- This is just a RUMOR. I can ASSURE you all no layoffs are happening atleast in January.
A statement like this would be a bit more reassuring if it were, say, a press release from upper MS management rather than the hundred-umpteenth anonymous post in a blog.
Layoffs or no layoffs, the rumor is *out* now, it's being referred to in numerous places including the Seattle Times, and yes, people are panicking. Seems to me that if there *aren't* actually going to be layoffs, MS management really ought to stomp on this loud, hard, and publicly. The fact that they're just sitting there and ominously not commenting makes the panic worse, regardless of whether the rumor's true or not.
I can't be to specific...however...
I'm out the door after double digit years. I had to sign away a lot of rights to get my meager severance package. After so many years of loyal service and stellar numbers I was shocked. I was stone walled at every turn for the last 2 years trying to move into different positions. People with less experience and less qualifications were given jobs I should have gotten.
To top it off...if MS had asked...I would gladly have taken a pay cut to stay.
Believe it.
I really want to baby shake anyone stupid enough to whine about unionizing our employee base. Please take the time to learn why unions exist before spouting random nonsense, thanks.
While I tend to agree with you, who's to say there's not room for a new type of worker organization at this juncture? Not something that we've seen before in industries like service, auto, trucking, but something else.
End of the day, if workers are feeling their management isn't listening to them, and they want to make a change rather than just pick up and leave, why isn't some sort of organization of workers appropriate?
I am sad and sickened by this topic for the blog, it is just letting outsiders get more fodder for their news, media and fodder. If you are a true MSFT employee, you would be the first person not encouraging such comments. How about we all rather spent time on being productive and spreading some positiove cheer, rather than creating all this fear at a time like this.Microsoft will do what a business has got to do, if we all were a little smart in the ways we spend the MS money and time the stock prices we go up, why always blame the "other " guy? the 10%, the Middle Mgmt, HR,Fin, Steve.. shame on us for not taking the responsibility and being a part of this rumor mill on which other people are feeding. If you think it is a critical time with the earnings release, why should a bunch of people create all this unstability? I love this company, it has done so much for me, do your best every single day and dont waste resources,be a positive influence and you will see a difference..
Why are we blaming HR and Fin? Are you guys telling me that HR pushes back when you go to them with a rationale for a poor performer? Do you all really step up as a people manager and do the right thing? Did HR make these low quality hires?
Google's presence in Kirkland shrinking?
http://seattletimes.nwsource.com/html/brierdudley/2008546909_brier22.html
So much for all those opportun ities outside of MSFT.
Pause. Time for all of us to take a break for a couple of days. Feel free to leave a comment in the meantime, I just won’t be moderating until the 26th.
Some comments from me on this: first, I apologize for making this post before Christmas.
Second: I don't believe that Microsoft will have a classic layoff.
It might be a couple of notches above stealth, though, so that the financial community knows that Microsoft is re-organizing to align groups effectiveness and to be more streamlined. So, for instance, it wouldn't be crazy to take a deep look at the parts of Microsoft where the "trains run on time" and determine, hey, these dudes don't have many (if any) PUMs, GMs, and Directors. They are pretty flat, too, and manage to reallocate resources effectively. Hmm. Let's do more of that.
I do believe will have a repeat of the post-internet bubble pop where HR is given the mission to re-enforce the back-on-track or out-of-the-company message. I hope they are there for the whole process, vs. just getting the ball rolling to create an action plan (difficult - but not near as difficult as tracking an action plan daily and then making the final call).
I also think there will be a group of folks given their n-weeks to find a new position at Microsoft only to discover there are no matching jobs. Sort of a passive-aggressive back-door layoff, but not an outright termination. None of this will warrant high-profile reporting, let alone mark Microsoft as a risky-place to consider working. So anyone looking for a big thunking layoff story during the first quarter of the year will miss out.
What burns me is that if we had been more effective over the years about staying lean and managing our hiring more tightly then Microsoft could be taking advantage of this time to make some great industry hires. But instead we're in the chop with everyone else. That is mediocre performance. Let's hope at least some sane, effective reorganization can happen now, under the excuse of the economy.
Great timing just got re-org'd into a new group and will need to prove myself. Hopefully the great transition review and skill set will be enough to last.
Replace Yahoo with Microsoft in this video and have a laugh at how much of it applies.
http://www.youtube.com/watch?v=_Gn4soId0EM
Can we all say "Not to Exceed" ?
Looks like a done deal
http://blog.seattlepi.nwsource.com/microsoft/archives/157832.asp
I bet your pardon? All this does is basically reiterate that this Wall Street says he *wants* MSFT to cut 10% so we can make up some difference in profits so he can see higher numbers. Doesn't say anything about MSFT actually doing it.
Do you actually read blog posts before posting something asinine like "It's a done deal"? Sheesh.
"GUYS -- This is just a RUMOR. I can ASSURE you all no layoffs are happening at least in January."
Maybe you know something...but sounds like the operative phrase may be...."at least in January." That doesn't exclude some time after January.
It is right opportunity to have best people and invest in future products.
Also whether economy is good or bad the unproductive overhead should be controlled and minimized (amount we spent on internal apps )
>I do believe will have a repeat of the post-internet bubble pop where HR is given the mission to re-enforce the back-on-track or out-of-the-company message
Dude, you must be out of your mind. You partners collect the big bucks for messing up time and over. You want the lowly paid HR to do the dirty job for you. This is why MSFT is going to the dumps.
Frankly, MSFT needs RIF. I am a MSFT partner. For our one Alliance person (who is business and technical), MSFT has four serving in different alliance capacities(pretty much ineffective people - some I won't even hire at MSFT L63). Since all four are from different MSFT organizations - are pretty hidden.
I would perfer one person, who is focused on his/her job and help us get stuff done.
Wow! Look at this post
Microsoft Plans To Cut Jobs By 10 Percent
http://www.newsoxy.com/microsoft/article11527.html
All written from comments from the minimsft blog and attributed to Microsft insiders. Look at the panic it can cause
Few previous posters mentioned partner salary can be lowered. We were checking on http://www.salarylist.com GMs are earning a base of $250K and many here have no reports or only 2 reports, that is some thing we need to change
"Let me suggest a few utterly fat and bloated orgs that could just disappear or downsize with little impact to daily business... EPG, DPE, Services, Office (big part of it), Windows (yeah I know even pending new product), Search...others?"
I'd like to add WGA to the list. The reason, the spending on WGA is much much more than we benefit from it.
Another worth cut fat is the PMs/PMGs teams. They really has no values, and sometimes, even are barriers to product development.
Microsoft should also clean the VP-GM-PUM structure. In these 3 levels, only one level is enough. The dev manager and test manager can directly work with this one level, which I would suggest GM (eliminate VP and PUM from the structure).
Under Ballmer's leadership I watched Microsoft morph from an innovative technology company to a sales company taking direction from Wall Street.
Ballmer's primary concern has been stock price and not quality software. The proper approach is to create useful, well made and desirable software that the world wants and the stock price will follow.
Ballmer's approach has been to emphasize sales, sales and sales to the detriment of all else. That is how Microsoft got into the situation it is now in. The downturn in the economy just brought the crisis to a head sooner rather than later.
Ballmer has to go and all of his salesmen execs with him. Cut from the top down and rebuild the company as a quality driven technology company. The stock price will naturally follow the production of good products as the economy eventually recovers.
Ballmer is just like all the rest of the bozos who run our country...clueless. He's got to go!
My two cents - a huge problem I find as FTE is the # of people putting personal agendas before team/company's goals. From testers more worried about showing off the weekly test report instead of focusing to keep codebase get infected with regressions to IC's that pursue the management ladder not because they really love to lead people but just because they can't go to the next technical level.
Wow, what happened to informed comments? Here's what I know:
1. Several big customers have not renewed SAs. This isn't just Vista, but also Exchange and other major revenue-generating products. Several contracts are going from being in the top-5 to zero. 2009 Q1 and Q2 are going to be horrific.
2. The whole worldwide economy is in a major slump. Toyota is losing money, for crying out loud. Microsoft leadership is working very hard to avoid mass layoffs -- unlike many other software companies that are cutting even if they don't have to. There's lots of creative thinking going into finding ways to cut costs without harming employees.
3. One of the more likely solutions to be employed is no bonuses in 2009 reviews. What are you going to do, quit?
4. Hiring is way, way down. Except for a scattered few positions here and there (SQL Server, Live Services, Search, etc.), Microsoft has almost no openings for external hires.
Opinion:
95% of Microsoft employees suck. You're self-centered whiners with no clue about what's going on. You blame "leadership" or the bottom 10%, your peers in other teams who have screwed up, anyone but yourselves. You show up to read email and surf the web, and call that working. Except for a scattered few product launches like Xbox, Microsoft employees haven't given their all since the 90's.
If you spent half as much effort obsessing over the details of your products (which the line-level feature teams own, not leadership) and asking important questions about your company and customers as the effort you put into posting comments here and gossiping without any facts, Microsoft would be a far better place. And you'd certainly be a far better employee.
Microsoft't P/E ratio is 10 which is less than any other big tech companies. Microosft's stock price is low not because it is less profitable, it is low because there is a fear that Microsoft can't innovate and will be cannibalized by newer technology companies. Firing people will feed to that argument and take stock price lower even more.
The management problem can be summed up in one word "Balmer"
Lay-off is a stupid option for Microsoft, the best solution is to re-org to cut the no working orgs/branches.
As for the stock price, it is the current economy. MSFT is much better than other companies. If you expect lay-off to raise MSFT stock a few bucks, that would last long and it is short visioned. I don't trust Wall Street anymore, the current economy crisis is the results of the mis-leading of Wall Street.
Geez! I almost joined Microsoft in June 2008 (BSOG - Enterprise Email stuff), but then decided against it to join Apple instead. I have been thinking since if I had made the right decision; and now it does look like I made the right one.
PS: I still think Microsoft engineers are top notch, and it's the management that needs to pull up their socks.
Stop saying things like cut the top etc etc..
I'm a 64 IC SDE, even though I just work around 45 hours/week - I code most of my product and help others with technical blockage/review/designs.
Although I being 20% of contributor to the whole product team (in terms of final code), I am just make 50-60% more than SDE/T who is making ~80k that do nothing much other than being email that they are blocked, complaint, stupid PKI emails and writing stupid automation that cover just 10% of the product.
Not saying that I'm a BIG dev or whatever. Is this fair?
Don't tell me to look for jobs in GOOG. I just came back from Google.
95% of Microsoft employees suck. You're self-centered whiners with no clue about what's going on.
If that is true it is largely due to poor management. The job of managers is to hire people who will be good employees and then guide them down the right path.
Is it really your position that Microsoft's managers are great and it is only the employees who are at fault?
>95% of Microsoft employees suck. You're self-centered whiners with no clue about what's going on. You blame "leadership" or the bottom 10%, your peers in other teams who have screwed up, anyone but yourselves. You show up to read email and surf the web, and call that working.
Yeah Right! How is the leadership promoting new partners, VPs and GMs for million dollar salaries?
"95% of Microsoft employees suck. You're self-centered whiners with no clue about what's going on."
I don't usually step-up to defend Microsoft, but dude... sour grapes much?
Microsoft has huge obstacles, a broken executive management and leadership model and we stumble all over the place... but 95% of the people I work with aren't whining losers, they're by-and-large smart, committed people who work hard and want to do the right things.
I'd love to hear more about your qualifications to make such pronouncements, however -- and you are... who? and you've done... what?
Most of us
Some people talked about GFS and DebraC. Here is her interview. See and decide for yourself the quality of Microsoft executive leadership
http://www.youtube.com/watch?v=hGWqayioXWU&feature=user
>95% of Microsoft employees suck.
The 5% that excel are Microsoft partners and the ones going to be partners in the next one year.
"Some people talked about GFS and DebraC. Here is her interview. See and decide for yourself the quality of Microsoft executive leadership"
Wow, there is 8 minutes of my life I want back. Even if you think her org is useful, she definitely needs to go, she didn't say anything of substance in that entire interview. What exactly qualifies her for her job? What qualifies half of the VPs for their jobs?
Tell you what...I have a great idea. Every Corporate VP at Microsoft should be given 3 months to come up with a "spin off strategy" for their division. The premise being that each VP should be able to have a full business plan for how they would take their division external as a new company. If they can't come up with a plan, they should be let go and their group with them...no survivors. At the very least they should be merged/slashed with another CVP that can make a plan. And for some of those CVP's, they should be given the option to spin out of MSFT and form that new company. If there's no compelling reason for a division to stay at Microsoft, why force it.
>Some people talked about GFS and DebraC. Here is her interview.
Shows vision and leadership. She is a star performer at Microsoft when compared to some other VPs.
>Don't tell me to look for jobs in GOOG. I just came back from Google
You couldnt cut it at Google?
MSFT was planning to move into about 300,000 square feet of office space in the new building across from the Whole Foods at Westlake and Denny. The deal has been called off or at least majorly delayed.
" Some people talked about GFS and DebraC. Here is her interview. See and decide for yourself the quality of Microsoft executive leadership
http://www.youtube.com/watch?v=hGWqayioXWU&feature=user "
She makes Sarah Palin look good
Another Anonymous said earlier: "some 40,000 contractors can be laid off."
Who would do all the work then?
As a vendor for 5 years in various orgs I can tell you that we 'contractors' do the BULK of the work. The rest is just pencil pushing, taking unseless meetings, planning RI/FI strategy and wasting time making graphs and bug glide charts.
MS has built itself around it's vendors, and if you get rid of us en masse, you are going to be stuck with entire orgs of primadonna senior leads and sub-par developers with no idea how to actually do their jobs without a force of solid real world engineers to support them. They are utterly crippled when it comes to rolling up their sleeves and doing the work.
Good luck with that.
Get rid of the H1B's, keep the workforce in America, and actually help the economy.
Well, we're powerless over whatever happens so let's just hope all of this is just a rumor. In the meantime, I plan on working my a$$ off before Jan 15 to show my value and impact on my team.
Pink slips coming at Microsoft.
http://infotech.indiatimes.com/News/Pinkslips_coming_at_Microsoft_/articleshow/3896583.cms
Why is it that the IC's get hit the hardest in these times. Especially in the Services groups. Its like "We wont support you, we are not going to give you the right tools etc., oh and by the way if you dont perform your the first on the fire list."
Why are middle level managers that do nothing but sit there and wisely nod their heads at decisions, left untouched. In terms of strategy I think it a poor way to go about things. Cut the people who work out and leave the people who 'manage' untouched. Bravo!
"Pink slips coming at Microsoft.
http://infotech.indiatimes.com/News/Pinkslips_coming"
Hey Einstein, ALL OF THE SOURCES IN THAT ARTICLE ORIGINATE IN THIS POST.
::facepalm::
If the question is "Whether MS should do layoffs", the answer should be YES. And there is a very obvious place where they can do the cut and that is the middle management. There are so many non-productive ones sitting there in the middle management level that they are more damagers that managers. I clearly believe that if a 50% of that layer is removed, it will not have any bad effect (if not have some good effect) on the company. But, if the ICs are targeted, that will be the worst thing to do. ICs were always the backbone of MS's success and not the management. May be this is the time for BillG to take the charge for the one last time and make the decision makers understand who made the company.
"Why is it that the IC's get hit the hardest in these times."
Uuhhh, because it's not the IC who decide who'll be canned. Or maybe you expect the mid level managers to cut themselves?
As for DebraC's video, I have never seen her before, but she's actually way better than most VP's I've seen. I am a white male, but it seems there's some sexism on the comments against her.
Regarding lay offs, it would be really bad for Microsoft's image, we should show the world that we are better than those other guys that fire by the thousands just because they've heard the word crisis. Because we indeed are much better than those guys.
Not to disappoint the doom sayers and our beloved competitors (that love to plant trolls here), respected publications say that Microsoft is strong.
Go to any business or tech publication and search for the words Microsoft and layoff. You'll see only references to the low possibility of layoffs, with a single place that talks about layoff linking to comments found here.
BusinessWeek
Meltdown 101: Where the jobs are
http://www.businessweek.com/ap/financialnews/D94SQSLO0.htm
Wall Street Journal
The only hits for the words Microsoft and Layoff are related to other companies.
Seattle Times
Only hits talk exactly about the rumors posted here.
Forbes
Articles talk about layoffs at Yahoo.
Fortune
Article mentioning that Microsoft are among the few companies hiring:
http://money.cnn.com/2008/12/01/technology/techjobs_copelandlashinsky.fortune/index.htm
And so on and so forth.
I've been through this before in the 80's and 90's at Texas Instruments. They cut the company over two years from 25,000 to 12,000 each time expecting to solve their stock price problems. Cutting peoples jobs and lives will only give you a short term bump in your stock price. It does not last, what does last is employee morale issues, and hiring good talent becomes harder. It's stupid and will do nothing to solve stock price problems.
>As a vendor for 5 years in various orgs I can tell you that we 'contractors' do the BULK of the work.
No work gets done in many groups. Vendor just collects pay check.
Hi,
I am a Vendor at Microsoft and I do want to comment on Skill level. As some one rightly pointed out, the Skills you acquire in one group are not the same in another group. I came to Microsoft with the idea that I will acquire more skills but I was disappointed when I did not work on lot of new technologies and as such my skills became rusty. It was a little bit tough when I placed my resume in the job market because my resume got passed on since I did not have the skills listed that they were looking for.
I believe you have to be in the right group to get all the skills, otherwise I think working outside Microsoft is not a bad choice to acquire those skills.
I always thought Microsoft is the ultimate place for acquiring tech skills. was I wrong?
Let us start a contest. There are 18 senior leaders and 110 VPs. Which ones would you cut without anyone noticing?
Most of the people in Microsoft are bright. If they are unable to come up with products that exceed market expectations, there is some problem with the process that they follow to come up with the specifications for these unsuccessful products.
Vista was prime example of the way they ignored the financial impact of upgrading hardware on millions of desktops in thousands of enterprises. In most of the cases, those existing desktops need to be scrapped and replaced with new higher end ones. Do they now understand why the Vista adoption is not picking up despite of all the marketing expenses?
They should have ignored pressure from Intel and other hardware vendors and rather should have focused on the CUSTOMERS.
If Vista would have been successful, it would have been a different scenario for Microsoft.
On a different note, the economy is in deflation mode. That means the cost of living is going down for the first time in several years. It is applicable to the Seattle area as well although a little less than some other parts of the country. Taking a pay cut of a few single-digit percentage might not be that bad after all. But usually managements do not believe in the paycuts, they would rather fire people. I disagree.
Anyone who says that MSFT shouldn't lay people off either hasn't worked there, doesn't work there, or if they do work there they are so heads down they don't know what is going on around them. I worked there for 8 years (left 9 months ago), and was amazed how many people were so blissfully happy, but painfully oblivious to things going on around them. There is a TON of waste at MSFT from stupid internal marketing spend, benefits that could easily be cut and still exceed the industry and people who do literally nothing all day. I myself spent my last year working on a couple slide decks and "working from home", but basically doing nothing. And it was totally fine. And once you start doing that, you can see and recognize others around you doing the exact same thing. And after doing that for a year+ I could barely live with myself, my sense of work ethic kicked in and I decided to just leave. Found a gig that has more than doubled my pay in a year, benefits not as great, but with that much more money, who cares. I work hard now, love it, get respected by my peers and am managing a team of 20 (and hiring, check LinkedIn). Bottom line, I still have friends at MSFT and they tell me things haven't changed. Still as much waste. So for those that say no layoff is needed...totally needed, top to bottom.
Oh, and VPs that could go... SanjayP, Eric Rudder, Simon Witts, Norm Judah, Bob McDowell (love him, but c'mon, what does he do), Richard McAniff, Ted Kummert, Robbie Bach...Ballmer. That's just a stsrt.
Get rid of the H1B's, keep the workforce in America, and actually help the economy.
Wrong. Having H1b will actually help the US economy. They will buy the car, rent/buy houses, eat out etc etc.. and eventually raise their family here. From an economist standpoint this is good.
Some vendor/contractors are good, some are not. They are needed for short-term filling in. Keep in mind, the good one are making much more money then most of the FTE.
DebraC's video just highlights what a poor job MS does to prepare executives for the lime light. It is not entirely her fault, I have witnessed at least a dozen leaders get promoted to higher visible partner level positions and almost all of them were very rough in presenting and poorly spoken overall. It took them a year or two to really polish themselves up but in some ways the damage was already done and many of the folks in the org had formed their first impressions.
That polish should be done in less visible roles prior to taking on larger roles to spare them the uphill battle of overcoming poor first impressions.
For the last time folks -- THERE ARE NO LAYOFFS HAPPENINGS IN JANUARY..mini, I would have expected some maturity from you before you posted these rumors...
beyond Jan...well we dont have a crystal ball -- but if the economy doesnt improve and the company misses targets -- it would get uglier for everyone -- from no raises/no bonuses to {maybe}cutbacks/layoffs... but then, those are the rules of the game in corporate America..
so for now -- enjoy your holidays, have a new year blast and then get back and work your ass off in the coming months --- for the overwhleming majority of you there -- things would be just fine!!!!
PLEASE DONT PANIC!
Let us start with Julie Larson-Green, the VP of PMs. What has she done other than sucking up to Sinofsky?
After reading a number of these posts it makes me happy to have left MS over three years ago. I hated the review cycles and the fact that MS owned my life. Any major HR issue like this one causes a serious amount of churn of time that could be better spent making, selling and implementing great products. Managers are probably frantic that they have to not only run the business but also figure out how to cut the business to meet spending projections. It must be simply nuts to be working there right now !!
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