Wow, what got in the corporate water for this week? Coming off the glow of last week's Company Meeting Koolaid we first got hit by the Goldman Sachs downgrade hang-over, then, to channel Mr. Ballmer, "Boom-Boom-Boom!"
- Health care changes on the way.
- Live Labs gets shut down.
- Technical Fellow Gary Flake, one of Microsoft few-TED stars, resigns.
- Technical Fellow Brad Lovering leaves.
- A glassdor.com survey that shows a lowly 50% approval rating for Mr. Ballmer.
- IEB gets re-orged.
- Massive gets shuttered (like we were all looking forward to billboard ads while blowing crap up in Xbox).
- Adobe acquisition rumors.
- Matt Rosoff leaves Directions on Microsoft.
All this right on the eve of Windows Phone 7 being launched. Feels like one big... purge.
As for the Microsoft health plan changes: I haven't personally taken a bunch of time to figure it out yet. I had a fully scheduled Friday and I half listened to the Town Hall while working. My attention lapsed and the next thing I know they are talking about a Health Visa card against our Health Savings Plan we can use for paying our share of a visit to the doctor and roll-overs and portability. I realized I just missed some detailed stuff. Microsoft has set-up internal forums to help the employees figure this all out, so I encourage everyone to utilize that. But in the meantime, a commenter on the previous post added this:
OK, I just watched the Health Care Town Hall replay. Hard thing to do early on a Saturday morning.
Let's see if I have this straight. If I go with the Health Savings Plan:
- All my preventive care is still free (to me). Annual physicals, dental checkups, immunizations, etc. - no charge. Wellness programs are actually beefed up even more.
- For a family of 3+, the most we would have to pay out of pocket annually is $2500.00.
- At the beginning of each year, MS will themselves add $3725 or thereabouts to my Health Savings Account...so MS is more than covering my $2500 obligation anyway.
- Even if I have a catastrophic illness or injury, I'm still ahead $1225.
I hope more insightful minds will follow up to correct any misunderstandings I have about this, but my takeaways from LisaB's deck are:
- Switch to HSP.
- Lose both legs in a snowboarding accident.
A follow-up to that:
Not quite right on the healthcare costs. Worse case scenario for family of 3 is:
- All your preventive care costs are covered 100% by MSFT
- You pay 100% of the first $3,750 in non-preventive costs. This is your deductible.
- After your deductible is paid, you pay 10% of non-preventive costs. This is your co-pay. You pay a max of $2,500 in co-pays per year.
- So your max annual costs are $3,750 + $2,500 = $6,250
- MSFT will pay $2,500 into your Health Savings Account each year, so your net out of pocket cost is $3,750. If you sign up for the HSP account in 2011-2013, then MSFT will contribute an additional "early adopter incentive" of $1,250. But after 2013, your max out-of-pocket costs are presumably back to $3,750
- You could pay that $3,750 out of tax-free contributions you make to your own HSA account, but then that money is locked away and can only be used for health expenses. If you don't want your money locked away then you have to pay with after-tax dollars.
- In order to come up with $3,750 in after-tax dollars, you'll need to earn about $5,000 in pre-tax dollars.
So, in the worse-case scenario this is equivalent to a pay cut of $5,000 per year. Maybe not too bad for someone making $200k, but that would be a 10% pay cut for someone making $50k.
Will increasing health care costs follow Ms. Brummel's charted path? It's interesting that the excise portion of the future ended up being a small little bump. Next: wellness - excellent idea. I love ensuring that we're all well and stay healthy upfront. But that includes affecting the ecosystem in which we live and ensuring people actually put time towards preventative health and making a place like Redmond a healthy place to live.
Sidebar: Just to whine a bit: for self-proclaimed bicycle capital, this is one hell of a scary place to ride a bike. Actually ensuring there's an infrastructure from the suburbs-to-work to safely ride a bike to encourage healthy living is some local influence Microsoft should have.
Sidebar two: Via DareO: The exciting nature of being ordinary - Sorting it all Out - one snippet: "Microsoft now looks ordinary to me."
I'm very supportive of whatever they can do about wellness (though the paranoid side of me hasn't liked the 'Know Your Numbers' campaign - who gets access to my numbers? Curiously, this extra overhead might prevent me from getting my flu shot this year).
Do I think the health changes will affect recruiting? Probably not. Do I think it will affect retention? Yes. See the above "ordinary" link. If other tech companies hold steady on their coverage then they close a big gap to hiring experienced people at Microsoft. Look, once you have a family and one or two big boo-boos (medical term) you realize: "holy crap, we are so fortunate... I love this company for caring for me and my family so well!" It's no golden handcuff, but it still anchors you.
Given cut-backs like this, whether out of cost-saving necessity or not, the Senior Leadership Team has to realize there's zero tolerance now for major money screw-ups like KIN and Massive. The bumbling flushing away of millions or billions of dollars is going to be compared directly to the reduction in benefits: if this company was actually run by people who knew how to consistently achieve profits, we wouldn't be looking at these losses and saying, "Yep, that could have paid for US health-care for a while..."
All-in-all, though, I think (not having immersed myself in the details) our coverage remains a better-than-average benefit. And as long as we don't have to revert back to the Pacific Care Primary Care / Referrals model (talk about a time-waster during work-hours) I'm personally satisfied.
Regarding Live Labs being shutdown: so what's left that Ray Ozzie is running? FUSE labs? You know, the people who blew their internal reputation by hijacking and hacking the Office Web Apps for http://docs.com/ ? I would not be surprised to see Ray finding a new endeavor sooner than later. First Mesh, now Live Labs.
As for Live Labs going into Bing... what the? I've watched a lot of curious hiring and initiatives at Bing. All the best wishes to you Bingsters, but you're beginning to resemble an organization that has way too many people and now you're just creating work to keep them busy. We've seen this before, and curiously, with some of the same leadership that's in Bing now. Better to put them on a productive profit making endeavor or risk having them cut loose.
From the comments:
Let's see if the latest round of "This will bolster the stock price works." IEB re-org and benefit changes. Doubt it.
Checked with some friends in the Interactive Entertainment Business and they glumly report "We're getting Sinofskied." (Not reporting to Sinofsky, but picking up the same kind of management structure.) Ah. I've always been curious if the Sinofsky model holds up in a creative group. Now we have one big example in the making.
Looping back to Mr. Kaplan's ordinary comment: Mr. Matt Rosoff's parting post on leaving Directions on Microsoft expresses it in a different way:
In Seattle, Microsoft was where the all the best and brightest worked, had worked, or wanted to work. People even pronounced it with a particular tone of voice, hushed but awful, like people back East say "Harvard." All-caps. "Yeah, he owns a coffee shop now. But he used to work at MICROSOFT." [...] it's not MICROSOFT anymore. It's just Microsoft. Even in Seattle.
How do you feel about that? You're not ordinary and you don't live an ordinary life. You don't expect to do ordinary work for an ordinary company, do you? What needs to change?