Microsoft Layoff 2009 - Now What?
22 January 2009: here we are at Microsoft: realigning resources and reducing costs. And laying people off. The day that has been rumored for a month now has come. And the staff reductions I've been wanting since starting this blog back in 2004 are here, though within an economic context I certainly Do Not Want. I wanted intelligent, well-thought-out leadership to have seen long ago that we've doubled our ranks far too fast and exceeded our ranks beyond what we can sustain (let alone need). Yet here we are now, in the choppy waters of the global economic crisis, being reactive rather than opportunistic.
Microsoft should be better than this.
This will start as a short post to kick off the biggest event at Microsoft that I can remember: severe cut-backs and staff reductions.
Initial coverage:
- Microsoft Reports Second-Quarter Results Modest revenue growth despite difficult economy; announces cost management initiatives.
- Steve Ballmers Entire Memo to the Microsoft Troops About Layoffs and Weak Results Tech Ticker, Yahoo! Finance
- Tech Trader Daily - Barron’s Online Microsoft FY Q2 Misses; Cutting 5,000 Jobs; Stock Slides
- Microsoft to cut 5,000 jobs All about Microsoft ZDNet.com
- Microsoft says it will slash 5,000 jobs
- Microsoft Pri0 Microsoft cutting 1,400 jobs today; up to 5,000 in next 18 months as recession hits harder Seattle Times Newspaper Blog
Some quick, shallow impressions:
- Not much is getting done today and tomorrow.
- 1,400 gone today (Who? It's a drop in the bucket) and now we have the remaining 3,600 hanging over our head during the next 18 months - what does that mean? I assume at this point that it means aggressive performance management is the rule over, and over again for each MYCD and annual review from here on.
- No raises as part of the annual review this year.
- No SPSA payout? No details there.
- Travel and contingent staff cuts. Very sensible and already in progress.
- Building expansion cut backs that Mr. Tartakoff at the Seattle P-I has already taken an early preview of.
- An outplacement center will be established. And hey, "some of you" may find jobs internally (good luck with the rush - I do hope over this past month you're already ahead of the game if affected) and there will be a severance package for the rest.
- The conference call this afternoon will include Steve Ballmer. And we have our Town Hall Friday morning. What questions do you hope get asked to Mr. Ballmer as part of this staffing reduction?
- Don't go asking your manager many questions today: this is news to 99% of us.
- Dang, sometimes anonymous comments can be truthful in what they share.
Administrivia: moderation turned off in the near term - note that I will delete:
- Comments I wouldn't have approved in the first place.
- Comments that quote comments I wouldn't have approved - so don't have a great comment that goes and spends a little time quoting an offensive comment because I'll have to blow the whole thing away.
629 comments:
«Oldest ‹Older 601 – 629 of 629"why are you so sensitive about H1B? Are you benefiting from it?
Everyone know it's a source of cheap and obedient labor."
What are you smoking???
H1Bs, and L1s, have to be paid the same as anyone else on same level, including U.S. citizens.
They are hired, when there is no QUALIFIED U.S. citizens available to do the job. On top of that, the legal costs to process the visa and move the new employee to the company are so high that it should be OBVIOUS to you that Microsoft would be more than happy to hire a U.S. citizen instead, if available!
You would find that it would be considerably cheaper to hire a U.S. citizen (if one was qualified and available) than hiring an H1B worker, because of the moving costs, paying thousands of dollars in Visa processing every year.
You can rest assured that Microsoft does not hire any H1Bs that are not qualified to work in the company - that would just not make sense, and should be obvious to anyone.
The key to success is improved education in the U.S.
I was laid off. Seattle is not looking too bad; I have 3 good leads plus 2 desperately searching that surfaced among my contacts immediately when I informed them.
The 60 days is due to WARN, not to msft giving a crap about you. The severance is due to msft giving a crap.
H1Bs are not to bring in cheap labor (outsourcing does that). Visas get the same salaries as everyone else from those I talk to and salaries posted on the different sites. That Iowa senator has that part wrong.
What it does do is change the supply/demand ratios. Water the supply down with tons of foreign workers, and you see base salaries for the levels haven't changed since the dot-bomb. Not enough talented US applicants because the pay is not remaining competitive; smart students are picking different fields for bigger rewards. I want to see Gates respond to Lou Dobbs request for interviews yesterday.
That said, some of the more talented coworkers I had at msft were H1Bs and they deserved the comp.
Now if my layoff allowed some "protected class" to remain employed unfairly, yea I'd be pissed.
I worked at MS from 1995-2002, and recently returned as a CSG. I've been stunned at the difference in the company since I left. The work ethic really seems to have changed. People are unresponsive and arrogant. It feels like I'm working at the federal government. It's supposed to be a cost-saving time and I've seen an incredible amount of inefficiency and waste. It makes me want to sell my stock. They should be laying off a lot more than 5,000.
Hey everyone looking for a good, central location to start your job search or post your company's hiring needs, go to http://www.seattlejobs.org/
It's an excellent local resource for skilled folks and companies to hook up and get together...good luck to everyone on both sides!
to fired on maternity leave -
talk to a lawyer, but since firing someone on maternity leave is bad form, I really doubt they'll mess up a chance to get you to sign away your right to sue them, by giving you better grounds to sue them. Legal running the company makes for crappy software but they usually get that stuff right. (maybe they should sell legal services instead of vista? oh never mind).
I was on leave when they decided to let me go. My benefits stayed intact right up until the termination meeting (as did network access, email, cardkey and access to my scumbag boss's calender to look at all his meetings with HR and Legal). The 1:1 was held the day my leave terminated and the severance agreement was dated 21 days after that.
The things you DO need to understand is that you will NOT have benefits between the time they terminate you and the time you sign that damned agreement, and cobra coverage is expensive. I would suggest that you take the rest of your leave time to take advantage of as many benefits as you can, and shop for the best private healthcare package you can find, just in case you either don't sign the severance agreement or exhaust the cobra benefit before you find another job.
Best of luck.
Yup, very sad for all who lost/will lose their jobs...Just to confirm, COBRA is a little over 1K/mo for a family of 3...So I'd think everyone at the company would want to visit their doc/dentist, use up FSA moneys right about...now
4. MSIT is a behemoth 5000+ folks by industry standards, should be trimmed down to less than 1000
Well, if you continue to add new internal systems (all built and developed by external contractors/consultants), what do you expect? Internal systems are a mess...even with the drive to reduce them, more than 1200+ systems is too much for a company like MS.
Message to Market: Do as we say, not as we do.
Microsoft India GTSC - Team Manegers : A bunch of over paid morons, who don't know the basic of Customer handling/Technology/anything. The layoffs should start from chopping their head, especially with people like Shankar MK, Debhasis Chakravarty, Kiran Pani, R Kannan, Bala....a bunch of low level Ex-Hardware Engineers now they are Team managers snoring all the time at work
When is MSFT going to get rid of the countless layers of useless and counterproductive middle management?
Btw, what's the proportion of management positions in the company?
And what is the same proportion amongst the people who were laid off?
just my .02,
A. Nonymous
Two things are likely to happen next week -- Washington DC asking more and more why H1's are working ar Microsoft when citizens are being laid off. H1's should be bumped (as happens with layoffs in a union shop). Microsoft may be forced to list all positions occupied by H1's etc and could be challenged by everyone laid off. I've noticed that a lot of the layoff are those over 50... I suspect a statistical analysis may reveal age discrimination in the layoff choices.
Second, I expect the stock price to stay flat and likely decline more -- 5000 is ineffective lip-service to the investors.
How about Windows Server?
Several of my reports were impacted, and one of the names caught me by total surprise.
What is worse on day is that there was no clear direction when I can tell those who were not impacted.
...and the H-1B backlash beginneth:
http://seattletimes.nwsource.com/html/microsoft/2008665300_microsoft24.html
There wouldn't have been any reduction in workforce if MS had a union in there. Especially with a measly 4 billion profit last quarter. The union would have just said no way. You let one go and we all walk. The end.
But since our dead ex-president Reagan was so successful in brainwashing people on the evils of unions and the wonderulness of CEO greed we're left to there mercy.
The successful elimination of pensions that was replaced with 401k's, ROTH's, IRA's will no doubt make retirement a myth for the working class in america.
Tragic.
I skimmed through the comments before I posted, so hopefully I am not posting something that is redundant but I don't think this has been brought up before:
Has anyone considered the fact that the reason the layoffs are spread out 18 months from the initial cuts are because they are waiting for some of the groups/division to wrap up on their current product release first?
E.g. There were no significant changes made to Windows, or Windows Mobile. But Windows 7 is in beta now and will probably ship in the near future, and Windows Mobile 7 is the behemoth that hopefully will get out of the door some day. Both are important products for MS and they cannot afford to cut people out of those groups now even if they want to. But I would probably expect the axe to go through those teams as soon as the product is out of the door. Thoughts?
Anyways, many said, what was most amazing is the lack of transparency in the layoff process. I know that MS doesn't owe us anything, and that we all signed the papers that tells us that this at will employment agreement can terminate at any time. But the fact that the layoffs appear to be done at a GM/Director level with no invovlement with the actual team is just weird.
Oh, and yeah it was sure as hell demoralizing to find out about your coworkers and friends walking out of the door, and not knowing who is around, who is not.
I also loved the fact that all of the upper management in the org, and at the townhall all blatantly dodged the question when they were asked repeated what the 'selection' process was for choosing the people that were let go. oh well.
*sighs*
Unions = Mediocrity
Just look at what they have done to Detroit.
Unions = Mediocrity
Just look at what they have done to Detroit.
Hah, and in Redmond we've achieved mediocrity without any union help at all! What progress!
I used to believe the majority of Detroit's woes were due to unionization. Now with better insight it's clear Detroit was mismanaged into the ground. The unions are just a symptom of their problems.
Redmond is following in Detroits footsteps. Has been for the past ten years. The '00s in Redmond are very similar to the 70's in Detroit. I once tried to have this conversation with JimAll 8 years ago, he blew me off of course. It's management arrogance like that which proves the point, unfortunately.
Well, if the analogy holds, Microsoft has about 30 more years before it's bankrupt.
I've noticed that a lot of the layoff are those over 50.
horsesh*t! I was laid off and am very near 30 years old. Maybe a lot of those over 50 are not pulling weight because they think their "protected class" makes them immune to repurcussions.
They also dodged the question of "selection process" during our layoff announcement. My team had I think one person over 50, and we all got the same axe.
What was the criteria for determining who got the axe, and beyond that, who was eligible for paid job search, and who wasn't? I wanted to know this info and scheduled a followup with HR to get answers.
I was told it was one or more factors--your percentage in your last review, the amount of time you've been at your current level, and the prospects for positions within your division. So depending on the situation it could have been only one of those items, or a combination of all three.
They pulled numbers from a database, so if there were extenuating circumstances (i.e. you were treated unfairly in your last review and even had a rebuttal with solid data) those weren't considered. Obviously there might have been other criteria they didn't divulge, like if upper managers were mandated to eliminate x number of positions of each discipline, but I'm basically relaying the explanation I was given.
"But Windows 7 is in beta now and will probably ship in the near future, and Windows Mobile 7 is the behemoth that hopefully will get out of the door some day. Both are important products for MS and they cannot afford to cut people out of those groups now even if they want to."
WM7 indeed let people go. I don't now how many but I do know of more than a few. And I hear that many admins also were RIF'ed--again, more than just a few.
I'm seriously sick of all the ignorant people who keep making statements like "kill Zune, spin off Xbox". E&D is full of VERY talented engineers and managers. Do you people realize that our stock is priced based on FUTURE growth expectations? Do you know how much money we make a year? These products are strategic and we have to make bets. Do you know what the most profitable and best example of SaaS inside of Microsoft? Xbox Live! Do you think we're going to achieve greatness through 2 more points of 90+ market share in Windows and/or Office. Growth in competitive markets do not happen over night. It took us three versions of Windows to breakthrough...E&D and more specifically Xbox 360, has been the most exciting product to come out of Microsoft in 10 years. It has proven to be a profitable venture and winning in this space will drive growth which WILL lead to greater shareholder value.
What about all those H1B's and the shortage of qualified technical people that Microsoft and all the other companies have been whining about? What about the lack of computer science graduates and their inability to fill their ranks? I guess now we know who was full of it and just trying to get cheap labor.
"Many of you want Ballmer to go! What's about ideas who can rule da MS instead of Steve?"
Warren Buffet?
Hillary Clinton?
John Stewart might be fun...
Let me start by saying that I know nothing about software design or the intricacies of building large scale software/hardware solutions. My main interest in Microsoft is from a shareholder perspective.
I have a question for those that know the industry well. Why does Microsoft need so many employees? I understand that the Windows 7 team is something like 1000 people and I suspect the Office team is something around the same or more. It seems reasonable with all the languages and products that the company would have a large number of employees. However, it is hard to imagine what ~95,000 people are doing day in and day out (even after all the sales, marketing, finance people are included). I am not saying that people aren't working, I'd just like an explanation where all the resources are directed. To me, it seems that Microsoft has multiple teams working on the same thing (i.e. foldershare, Sync, Live Mesh) and the redundancies cause extreme waste (and likely lots of infighting).
Does anyone have an explanation? PLEASE!!
Don't assume it was only 10%ers that got cut. whole teams were eleminated regardless of performance or business success of the unit. Laying off the right people is as important as hiring the right people and i can assure you that there were some wrong people let go and wrong people left to endure the next miserable round.
As someone that was laid off along with most of my team last Thursday I can tell you that:
(a) GM-level decision making, not Dev Mgr/Test Mgr/GPM level.
(b) If your team was already "wrapping up" a release, you were more closely scrutinized for cuts. (cheaper to cut). Even if your product is *profitable*, it still must be in-line with the primary objectives of your VP.
(c) Everyone on the team was affected independent of reviews / promotion history / etc.
For the team, 3 people that stayed were recently promoted, 3 that were let go were also recently promoted (less than 18 months in level). Only a skeleton-crew of folks were kept to do sustained engineering work.
If you are not working on the top priority product within your organization, you are up for the next round of cuts. This is independent of review score / recent performance / effort / current level / individual cost to MS.
I would expect the next round to be similar in targeting as the first round, just a "do it again" message from the bean-counters.
The last of the 3 rounds to finish out the 5K will likely be a cut-throat lower-70/anyone in the 10 chop.
Note that of course once this last round happens, all the remaining people in the low-70 bucket are next on the list.
MS as usual, panic mode is the norm, and no thought out plan with Mr. Ballmer running the show.
I was layed off, and I made 150% of my quota last year, go figure how they are choosing who to lay-off and who to keep.
It is amazing that this company is soooooo BIGGGG and sooooo unorganized.
There was a post by an MCS Architect who had been made redundant on 22 January and had been offfered 2 weeks pay for every 6 months service.
Could you confirm that you have the offer in writing? I was told, I too have been made redundant, that everyone would be treated equally and offered the same package. But that hasn't been offered to me. I'd be interested, very interested, to find out more. I'm a level 63 as well.
Please post back if you have written confirmation and I'll get in touch.
Many thanks.
Standard Chartered Bank also sends the employees back home worldwide.
The bank is going through a severe problem
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