Sunday, January 25, 2009

3,600 Microsoft Shoes Waiting to Drop

A profound thanks to all the people who spent time writing heart-felt and high-quality comments over the past few posts. When big events like this layoff happen at Microsoft, it shakes loose collective thoughts that have been building for a while, many of which exceed anything I've written here. There are some gems within the most recent 1,200+ comments. If you're not a typical Mini-Microsoft comment reader, you should spend some time reading over the last three posts' comments, the last two especially:

Now you'll see some random and non-high-quality comments are in there, too. I had to flip moderation back on when the conversation about Microsoft H1Bs got downright nasty. I acknowledge there is concern about citizens losing their jobs at a company that has historically been on the forefront pushing for H1B visas. Going forward, I expect that Microsoft U.S. H1B hiring comes to a near halt.

OHAI: The elephant. There's a rather terse looking elephant in the room staring at me right now and pointing at its laptop screen. What's it got here... let's see. Ah. Blast off for Mini-Microsoft! And some text is highlighted...

  • Microsoft needs to reduce employee size. It’s too big. It doesn’t need a quicky Atkins-equivalent. No, it needs to get itself on a corporate exercise program that will shed itself of unwanted groups and employees. And stay on that.
  • Microsoft needs to stop hiring. It’s hard enough finding the scarcest of treasured corporate resources: the talented individual suitable for working at Microsoft. Stop hiring, trim down, and rebalance those precious scare employees inside to where they can be more productive and make products that delight our customers.

So before I get all thankful that this blog has provided a community-style water-cooler for discussing and ruminating over these layoffs together, I have to acknowledge that yes, I support reducing the company size. Big time. Back when I wrote the above in 2004 I felt we were already too big and encumbered with mismanagement due to our size. Over the years, rather than it being a blast off for a mini-Microsoft it became a blast off for a MAXI-Microsoft. When I wrote the above, I wanted a common sense realignment of our people and groups to focus deeply on the products we needed to be involved with. I also wanted the under-achievers moved on.

Instead: now we get the achievement-ignorant crash diet of this past week and we'll try to keep on that diet for the next 18 months, with the occasional binge. Yeah, good luck with your corporate ketosis level. I believe we need to smartly right-size downwards at least another 10,000 globally and lock down hiring. Emphasis on smartly. Going forward, we risk going through spurts of layoffs now given that we over-reached and will continue to over-reach.

Getting back to community: looks like there are Facebook groups for people affected by the recent events to get together and network with each other and with possible local recruiters (good for the recruiters since talented people got the pink slip). Here's what I've found so far:

  • Help Microsoft Friends Find a Job
  • Microsoft January 2009 Alumni
  • The Microsoft 1400
  • 2009 Microsoft Laid Off Workers

Employee Town Hall: if you watched this Town Hall to get some comfort, Mr. Ballmer's opening remarks certainly popped your balloon of hope. As already reported elsewhere, Mr. Ballmer thinks it's another year or two until hitting bottom in the current economic crisis, and when it does bottom out, the subsequent level of spending reached will be well below the glory spend days.

Tip of the hat to the two questioners: bad hires + accountability and seeking that corporate "I'm sorry."

My biggest issue is that Mr. Ballmer reiterated that his unabated ambition drives what we do and that we're going to continue to go big and broad. "Forward down the field! Faster down the field! Move! Forward forward forward forward!" (slap my forehead as some of his front-row half-backs chuckle for their man) Oy! Going big and broad and trying to enter and dominate every possible software market is exactly what resulted in Microsoft having reactive and broad, shallow features that are rushed out lacking polish and usually lead to user frustration as the shallow experience putters out.

We should not go broad. We must rebalance and go deep, without redundant teams and teams working on products with no chance to see a release. Now is the perfect time to drop compete in some markets where the teams in place just are not going to succeed and drop those groups. I'm not happy with our portfolio. And I'm surprised that the Microsoft Board of Directors can't smell the rotting fish in the portfolio. Well, then again, given our Board's results, maybe I'm not surprised.

I've been revisiting Good to Great lately. Some joke that Mr. Ballmer read it backwards. Now more than ever it is so incredibly frustrating to read about the Level 5 CEO leader and think about the gap we have between where we are and a leader like that. I'm also disappointed that the potential LisaB started out with in her Listening Tours and the early InsideMS employee participation has been squandered and lost. I know... she proposed changes to Ballmer and Ballmer said "No way!" Well, keep driving at it. Keep having the conversation and leverage the employees to make it happen. Creating a new way to be an employee in an IQ-driven 21st century corporation is still possible. In the meantime, we've slapped on superficial ideas that might have scaled and been manageable with a 1990s 20,000 employee company, but in this age those ideas no longer work, let alone apply to our huge employee base.

So we'll continue with our divisive stack ranking and celebrating the individual over the group. I realize that none of this is going to change while Mr. Ballmer is in charge. And when do you expect that to change? Unless the Board sees the villagers shareholders running at them with pitchforks and can feel the heat of the torches on their neck, that is not going to happen any time soon.

Random links:


322 comments:

«Oldest   ‹Older   201 – 322 of 322
Anonymous said...

window moibile 7 cut 37 jobs, most are junior positions. And they are going to spend more than 3 min for buiding renovations

Anonymous said...

As far as H1B workers go, I know of Indians who attended US grad schools and were hired by Microsoft. They are allowed to work for one year in the US on their student visas, then have to apply for an H1B. Since the H1B lottery was started, many had to relocate to Vancouver if they didn't get an H1B visa.
H1B workers shouldn't be first to lose their jobs vs. US citizens like me, but clearly the rationale for tech companies requesting such visas (that no US workers can be found) loses impact when US workers and green card holders are put on the street. Any company who has laid off such workers should have their next year's H1B quota reduced accordingly.

Anonymous said...

To the employees who have been laid off - what coverage does MS provide for continued healthcare?

I mean if I get laid off tomorrow, does microsoft provide continued health coverage for a few weeks, does it pay some money? What is the deal?

Layoffs are coming soon to our group (as per our gm) and I am anxious about an existing health condition.

Any suggestions on how to deal with this are most welcome.

Anonymous said...

somewhat OT, but what is up with stock buybacks? I know the theory, that reducing the shares outstanding makes the remaining shares more valuable. But Microsoft has been pouring BILLIONS and BILLIONS into this for years while the stock remained stagnant, and has now declined quite a bit. The P/E has come down to something as sexy as a rural electric utility company, and still more money is poured down the rathole. Why not just fatten the dividend, so the stockholders who have been waiting with incredible patience get some benefit before they retire or die?

Anonymous said...

> It also 'encourages' (read - forces) companies to occasionally take the hit, instead of passing it to customers and employees.

Uh-huh, suuuuurrrre. And where do these idyllicly altruistic companies get the money to take the hit? Customers always foot the bill, they are the sole source of funds in a company. Never let yourself forget that.

Anonymous said...

>> The week of April 20th may
>> be the next round. Gird your
>> loins.

This makes sense, if they want to avoid paying the bonus. Anyone who is employed as of June 30 is eligible for this year bonus. Given the 60 day WARN requirement, the layoffs might be before April 30.

Anonymous said...

"And when whatever gig you are on dries up, you must be ready to move on and add value somewhere else. I have a feeling that most of you will be in denial and ignore this advice."

I don't know, this sounds like good old common sense to me. Anyone who hasn't done that during their career in MS has bigger problems. Grow, change, don't stagnate, these are basic things to remember in a career.

My husband was in the 1400 and he already has a number of companies expressing an interest in him that he has contacted. The opportunities are there if you're bright, sharp, willing to work, and can look hard enough. Network, ask friends and family about opportunities. And maybe most importantly, do can the arrogance. You might find that a lot of doors are open to you just on the basis of how you've treated people. Good luck.

Anonymous said...

To the person at the Redmond Town Center Marriott.

You'll have better success wearing the sandwich board around building 25 - the designated Homeless Shelter for those people on internal job search.

Or so I've heard :)

Anonymous said...

"Is the employee compensation plan going to be restructured given the poor performance of the stock and tie everyone's performance to the business unit's operating income and make the bonus part mean something? Why not?"

Seriously. With 5 years of vesting stock awards formerly counting for about 1/3 of my pay, and that stock down 40-50%, the company has already effectively cut my pay by about 16% this year. (barring a dramatic turn around by September of course). They may account for it differently, buy my W-2 this year will be a lot less than last year.

Cerulean Bill said...

Very, very good post. I'm an exIBM, my wife's a (probably gonna be) exEDS, and we both see the same thoughts and attitudes in those companies - ie, why are we shifting the deck chairs on this listing ship?. Both (and MS, too, of course) have been and can be again excellent companies, but at the moment... not so much, certainly not globally. Leads me to wonder if there's a max size/max diversification level that a company can be, past which its just too difficult to maintain any real sense of accomplishment and committment at the grunt level.

Anonymous said...

On the subject of voluntary severence, that's a bad idea.

The attractiveness of such an offer - especially in today's economy - depends on the ability of the person to get a new job.

The people that you would like to take it are feeling lucky that they have a job and don't want to take the chance that they wouldn't find another.

On the other hand, the stars that are already known outside the company see it as a way to take a 6-month paid vacation and then do something new.

IBM did this very thing when they needed to reduce employement back in the 1990s. It was very effective at getting rid of their best people...

Anonymous said...

Please, please, please declare the whole H1-b topic offlimits and moderate them out. Either route those posts to a dedicated thread, or direct people to go to their own blog.

There is a lot of FUD, misinformation, conflicting info, hate, and generally non-productive conversation. And that's over and above the usual % of trolls on the blog overall.

Until someone with actual legal background can spell out what the laws are around H1-b and how it relates to layoffs, anything here just adds to the noise.

Anonymous said...

"And here is the ultimate acid test about how good you are for each of you: After you leave Microsoft, how long will it take you to find work?"

bah I disagree - finding new work has many other aspects than "how good you are". 1. The field - try being a recruiter and finding a job in this economy. Doesn't matter how good you are no one is hiring recruiters. 2. Sadly its still often more to do with who you know not what you know.

Anonymous said...

"The reason why you won't hear about massive layoffs in (the oh-so-despised) socialist France is that their labor laws are very restrictive in terms of who and how you can fire. Granted, this places an extra burden on business, but in time it also makes large corporations more careful regarding who they employ and how far they extend their workforce. It also 'encourages' (read - forces) companies to occasionally take the hit, instead of passing it to customers and employees."

Two sides to that coin.
It also leads to a higher structural unemployment because employers are reluctant to higher given how hard it is to let someon go.

Anonymous said...

Anybody care to write an open letter to Steve Ballmer? I admit I don't have the balls to ask questions to Steve face to face in the town-hall meeting, but I really believe it is time for him to hear the voice from the field, loud and clear! Some of them may sound harsh, but I only said it because I still love this company and hope it can survive the next decade.

If I could, I'd make the following suggestions to Steve Ballmer and the top management team.

1. MSFT missed its quarterly estimation but Google IBM and Apple beat theirs. To blame our own failures to the economy is a convenient way to shrug away our problems. But last time I checked it, “Accountability” is still one of our company values. I believe now MSFT is facing the consequences of lack of vision and bad execution for a long time. It is a critical turning point for MSFT right now and I believe we still have a chance to turn things around if we act correctly and quickly.

2. We need a CLEAR SaaS strategy. We haven't been sitting on our hands and wasting time for way too long and need to address the problem immediately. Software is becoming a utility and computation is moving to the cloud. Turning a blind eye to this industry shift wouldn’t do us any good. Our OS and rich client productivity software need to migrate to the online version.

I’m not saying we need to ship our online version of Office tomorrow, it is well known US still have a big chunk of dial-up users today, so are the rest of the world. But in this downturn economy environment, if we don’t migrate online quickly, Google will kill us eventually. Period.

3. The company needs to value Engineering Excellence. I've been working for MS Service for over 10 years, and I feel this company now is far less valuing EE compared to it did 10 years ago. Managers are driving “initiatives”. People are talking about “Compliance”. What’s the value of all these wonderful stuff if nobody is really working to create great software or help our customers? Why Xbox has the red-ring of death problem, and Zune has the stupid bug at the new year? Isn’t that a clear enough sign MS isn’t paying attention to product quality and customer experience anymore?

And how long do you think a company can survive since it starts to ignore product quality and customer experience?

4. We need to reduce our mid-management levels drastically. Too many levels of management is the company cancer. It prevents the top management from hearing what the customer is thinking, and it prevents the people in the front line from executing our top management’s ideas efficiently. Take Vista as an example, since it comes out, our desktop OS market share dropped to below 90% for the first time in the last 10+ years. And I don’t have one single customer or friend who tells me s/he loves it, yet when I went to TR our top management is CELEBRATING the victory of Vista on the stage. Sitting in the audience crowd, I was thinking to myself, what is fxxking wrong with this company??

5. We need to shut down Live search, Zune, and Window Mobile. We wasted tons of money on these areas and achieved nothing but proving ourselves morons compared to Google and Apple. After years of investing, Live search today may have 8% percent yet still shrinking market share. Zune? 4%. Windows Mobile? Apple beat its pants off with only one iPhone. Now it is time to admit we are not good at these areas, and let the competitors enjoy what they deserve to enjoy.

6. People in the product group and research group need to spend time with our customer, at least one month a year. From many email threads and conversation with the product team, I concluded that many of our product teams don’t have the slightest idea of what the customers want and don’t want. I have many frustrated customer who saw the product bugs reappear in the next release. What value is there for the customer if you keep adding features to the new release and reintroducing the bugs that are fixed in some QFE/service pack of last one?

Anonymous said...

>> Microsoft needs to compete with startups

Give me an example of Microsoft competing "with startups".

Anonymous said...

It seems to be that all those that are complaining about severance being denied if they start new job within 60 days are complaining without much reason.

Microsoft is required by WARN act to serve the people that were laid off 60 days notice while they are still in payroll. Per your NDA, you are not allowed to moonlight while you are still employed at Microsoft. And for those 60 days, you are indeed employed by Microsoft.

So, what is the major problem here? If you find a job before then, negotiate start date to be after March 23rd (or whenever your 60 day deadline is). If you are really good, and the company really wants you, the company will likely agree to have you start later. Or, just delay your job search for a little while (especially if you are good and confident that you will find job quickly).

You have a pretty good severance package! It gives you room to do your job search in a more leisurely fashion than otherwise and truly find the job that you like. And you could even use the 60 day period to kind of decompress and think through about what you want to do next.

Anonymous said...

I must say that I do not understand the value of the severance package. Please tell me if I have misunderstood the package being offered -

The 60 day "job search opportunity" is not a result of Microsoft's generosity, but rather part of the WARN act -
http://www.doleta.gov/programs/factsht/warn.htm

As I understand the WARN act, you will get 60 days of employment, whether you sign the severance agreement or not.

If a RIF'd person is employed for 60 days after notice, he/she should be entitled to all the benefits of other non-RIF'd employees during the same period. In other words, you can search for a job internally, if non-RIF'd employees are also permitted to search for jobs internally. How is Microsoft giving anything new in the severance package?

The only part of the severance package that Microsoft is giving you out of its kindness is the 1 week of pay for every 6 months of service, since the date you last joined or rejoined the company. This part of the severance package may be valuable to some people.

The people who have been at the company for a short time since last hire or rehire are not gaining much. One or two weeks of pay may be useful, but it is unlikely to be more valuable than the money you could get from any potential lawsuits you can file in the future if you have personal grievance - being laid off when pregnant, disabled, etc, especially if you are the only person from your entire group to be laid off.

On the other hand, those who have had several years of service may lose more money in the lay off than they could have got from their stock awards. These are the people who need to evaluate whether they should sign the severance agreement or not.

Based on what I have heard from previously RIF'd employees of Microsoft, the outplacement service is also not worth the effort.

It appears that Microsoft's severance package is a marketing ploy that misrepresents already existing benefits as provided by law and depicts such benefits as being part of the package, with the malicious intent of getting RIF'd employees to sign away their rights.

Am I wrong? Politically maybe. But legally, have I misunderstood the value of the severance package?

Who da'Punk said...

Administrivia: I've been rejecting a good number of comments, and some have landed on the Cutting Room Floor.

I'm done w/ H1B back-and-forth for now. If you still have a lot to say and can't find an appropriate blog to comment on, you can spin up your own and link to this post.

Also, the tragic Bellevue Microsoftie death is way off topic to discuss.

Anonymous said...

Left two years ago after 15 years total as MS. Although happy with my job, co-workers and compensation, I realized that I'd become totally Kimmed for having spent way too long at the same level.

Perhaps the reason there are too many mid-level managers is due to the Up or Out philosophy. If you don't get promoted, you will get asked / forced to leave. Hence, the only place to put someone you still like is middle-management, in a role that may not be really necessary.

If MS was willing to let you hit a level and then really focus on becoming great at that job, they might have less back-stabbing, better morale, and less silly feedback given to quality people simply because they weren't interested in the ongoing uphill disco.

By the way, how long has SteveB remained at his level...?

Anonymous said...

Question - does every laid off employee get that 2 month salary + 1 week/6 month of service?

I have read conflicting comments about 2 month salary part - some got it and some did not get it. Is it true? Arent they suppose to give it to all employees getting laid off, to comply with warn act?

Anonymous said...

Anybody care to write an open letter to Steve Ballmer?

Why waste your time? You think he has any interest in hearing what you or anyone else has to say?

Anonymous said...

"To the employees who have been laid off - what coverage does MS provide for continued healthcare?"

You get continued healthcare during the 60 days. After that they include in your lump sum severance/vacation the amount they would have spent on your healthcare for the severance period; if you have been employed 1 year, you get 2 weeks severance plus the cost of 2 weeks coverage (presumably so you can pay 2 weeks of COBRA). You can see the amount of your healthcare cost on your paystub.

don't panic! The severance and 60 days is an alright deal and will give you plenty time to find work. Even in the current job market. Freaking out about it is not worth the stress. Plus you risk screwing up your review if you aren't in the small small number of laid off.

Anonymous said...

Everyone got the 60 days on payroll. NOT everyone got to keep their corpnet access and such for an internal job hunt DURING those 60 days. Some people lost access by EOD the next day (Friday).

Anonymous said...

Anonymous wrote:
On the other hand, those who have had several years of service may lose more money in the lay off than they could have got from their stock awards. These are the people who need to evaluate whether they should sign the severance agreement or not.
------

The reason I could see is a simple desire on the part of the former employee to move on and get this all behind them ASAP. Other than that reasoning, why would someone whose severance beyond WARN pay is 20% of their waiting stock awards, sign? Inquiring minds would like to know.

Anonymous said...

"Perhaps the reason there are too many mid-level managers is due to the Up or Out philosophy. If you don't get promoted, you will get asked / forced to leave."

So what is a reasonable lifespan for an L64 who is new to the company (but not the industry)? How long could one expect to stay at L64 before being pushed up or out?

Anonymous said...

>>You could reward teams that not only set aggressive goals, not only meet those goals on time without screwing people, but manage to do it all in a 50 to 60 hour work week.

When will people learn to see late nights and weekend work as a sign of failure instead of a heroic effort?

Probably when they realize that "all in a 50 - 60 hour week" means "just" 20 - 50% unpaid overtime.

Anonymous said...

>"don't panic! The severance and 60 days is an alright deal and will give you plenty time to find work."

Ha ha ha. Not a softie here. I was looking at some reports on unemployment in China due to reductions in shipments of stuff we don't need to the US. It was a scary sight, of a sea of humanity (all dressed in the same color clothes) bumping and nudging to sign up for a few meager jobs.

Here in the US, there are millions of us boomers in tech who have been of and on looking for work for a few years now, not the least of which has been since the economy went bust in January of 08.

This is not your run of the mill recession. This one kicks your ass in the gutter man, if your unemployment, severance and savings and supportive other run out.

Murphy was an optimist too. I would panic.

Been there done that.

Anonymous said...

"Customers always foot the bill, they are the sole source of funds in a company. Never let yourself forget that."

No. They often do, but there are times when a company can't or won't pass along a cost and absorbs it themselves. Also, customers are not the sole source of funds in a company. Personal funds, venture capital, debt, and equity sales are all common sources of funds as well.

Anonymous said...

So what is a reasonable lifespan for an L64 who is new to the company (but not the industry)? How long could one expect to stay at L64 before being pushed up or out?

For many groups it's acceptable to stay at 64 indefinitely -- it's the limbo level between lowbie and principal where you can actually have a long stint without getting kimmed.

Anonymous said...

"don't panic! The severance and 60 days is an alright deal and will give you plenty time to find work. Even in the current job market. Freaking out about it is not worth the stress. Plus you risk screwing up your review if you aren't in the small small number of laid off."

Bull. Shit.

Perhaps you haven't been paying attention *at all* to what's been happening in the world or how truly ugly it is out there right now... every week the market is being flooded with people just like us who are looking for work, and every week more companies are going under.

We are in a global depression. Nobody should be cavalier about what's happening or how long it might take to find a job.

60 days is 2 months, and in this economy that means hitting the ground running as soon as you know what's coming and feverishly working to secure something -- even if you're really good.

Anonymous said...

"You could reward teams that not only set aggressive goals, not only meet those goals on time without screwing people, but manage to do it all in a 50 to 60 hour work week.

No thanks, you can keep your sweat shop. How about rewarding teams that set aggressive goals while still allowing people to see their children every once in a while?

12 hour days? Are you 23? What a miserable existence.

Anonymous said...

Question on Washington State Unemployment Weekly claim

This is the first time in my life I've filed for unemployment. I used automatic deposit for paychecks - and since I no longer on corpnet I cannot view paystub. There's at least a 30 minute wait on the phone. Can someone please advise how to answer these questions? How do I answer these questions?

Did you or will you receive holiday pay from your regular employer for any day of the week you are claiming?* (I don't know since cannot view paystub)

Did you or will you receive vacation pay for any day of the week you are claiming?* (I don't know since cannot view paystub)

Did you or will you receive pay in lieu of notice or termination pay for any day of the week you are claiming?* I assume this relates to WARN act payments until 3.23 for mass layoff.

Dollar Amount I don't know, I am unable to access corpnet.

Thank you

Anonymous said...

In response to Cerulean Bill (and other commenters bemoaning the disconnect at Microsoft between the workers in the trenches and the management layers above them), I just read this excerpt from the 1985 Playboy interview with Steve Jobs, and thought it seemed to fit the current unfortunate situation at Microsoft rather well:

-----------

Ten to 15 years ago [1970-1975], if you asked people to make a list of the five most exciting companies in America, Polaroid and Xerox would have been on everyone’s list. Where are they now [1985]? They would be on no one’s list today. What happened?

Companies, as they grow to become multibillion-dollar entities, somehow lose their vision. They insert lots of layers of middle management between the people running the company and the people doing the work. They no longer have an inherent feel or a passion about the products. The creative people, who are the ones who care passionately, have to persuade five layers of management to do what they know is the right thing to do.

What happens in most companies is that you don’t keep great people under working environments where individual accomplishment is discouraged rather than encouraged. The great people leave and you end up with mediocrity.

-----------

http://www.playboy.com/magazine/interview_archive/steven-jobs/steven-jobs.html

Anonymous said...

Last year MS had $1.16B in Russia. Today its execs are practicing themselves in shadow talks with contingent staff convincing employees to leave quietly in exchange of three months salary. As a shareholder with 4-digit number of shares I can't resist asking them: why are you cheating on me?

Anonymous said...

Anonymous @ January 30, 2009 7:50:00 AM

Thank you for the Friday afternoon chuckle.

I had the very same thought, but was disinclined to fan the flames between those with contempt for people who try to keep to an 8 hour day and are fortunate enough to be in a group that doesn't over-load them, and those who think that all people who work 50-100 hours a week are suckers doing it for some reason other than to keep their job at ship time in a group with a "no moves" rule.

Anonymous said...

why would someone whose severance beyond WARN pay is 20% of their waiting stock awards, sign?

Maybe because one has no legal basis for lawsuit, because it's more than they have to give anyone, because one has pride and dignity, because one does not have a narrow little mind ruled by filthy lucre?

Anonymous said...

So what is a reasonable lifespan for an L64 who is new to the company (but not the industry)? How long could one expect to stay at L64 before being pushed up or out?

I think that at L64 and above you are technically allowed to "plateau". Lower levels if you are "at-level" for 2-3 years you better start worrying about moving up.

Even at those "plateau" levels I wouldn't get too comfortable. L64 should be scheduling meetings with VP's (especially not in your direct chain of management) to get visibility and should be mentoring junior members as well. L64 should be coming up with "big" ideas to advance Microsoft's business and should be filing patents.

At least that's what my manager told me I should be doing at L63. I thought he was nuts so I quit.

Anonymous said...

For the person asking about unemployment. I do not believe you are eligible for unemployment until after 3/23. During the 60 day period until then, you are considered an employee of Microsoft with a status of "Administrative Leave".

You will receive whatever corporate holidays happen between now and then (none I think) and your vacation will accrue until 3/23. MS then has 30 days to pay your severance including any accrued vacation pay at that point.

You will not be paid remaining sick time or floating holiday time. Vacation is considered "earned" but those are not.

Anonymous said...

@7:15

Brilliant comment... I am in that spot now and totally hear where you are coming from.

Trapped at 63 a looong while now, Im realizing that the choices are either to maneuver your way up to about 65 at which point you are prime RIF material for being "overleveled" or languish at 63-64 and eventually be branded limited and then become RIF material.

The message is that if you are a technical IC, you dont really HAVE a career at MSFT. You get about a 5 year window before your age becomes a factor, or you out level your managers, or you're branded "dead weight"

This is what happens when a braindead management culture perpetuated by koolaiders who just swallow what comes down from above takes over.

When asked how to get from 63-64 (same level band) the answer is basically "cure cancer". But Im not complaining at this point. Everyone I know RIFd was a top performer (including many billable consultants) but were lvl 65.

Great job cutting. Mini is right. The company actually needs MORE than 10,000 cuts, but we'll never see them.

So far from what Ive seen people were cut because they make $10k too much or are disliked while others who are useless were happily kept around.

You cannot trust inept management to intelligently restructure. Its a shame because I really wanted to have a career here when I joined lo those many years ago.

Anonymous said...

"don't panic! The severance and 60 days is an alright deal and will give you plenty time to find work."

There are 53 days left now, and they will continue to go by too fast. It must be nice to have so much confidence during the worst global economic spiral of my lifetime - or are you just out of touch with your inner-freakout because you are not in the 1400? It is one weird world during the past week, perhaps enhanced by the lack of sleep. I do agree that for those with a long MSFT tenure, the severance should indeed ease the blow somewhat.

Here's where things stand for me: After a week of calling old colleagues and researching job opps, multiple job submissions have yielded: one phone interview locally, where the pay is a 20% cut in base, two phone interviews scheduled next week, a few declines, and possible interest from a couple of more leads. Maybe something with a former employer that I hoped I was done with forever. We all know that a phone interview does not equate to an offer. What about next week? What about when it's March 23? As in, what if nothing has come up, the thousands of layoffs announced around the country have continued to escalate as they have during this week, and my family has no income? Hope your platitudes are helping me feel better by then, or I am counting my lucky stars that something worked out before the end of my pay and insurance coverage for my family. So I need to find another good job, not just a barista role - but there fewer of those now as well. At least Howard had the decency to ask to have his salary cut to around $10,000 (the amount needed to maintain his insurance benefits) for this year. Still can't forgive him for selling the basketball team.

As a point of interest, a relative works for a large international accounting firm where they received notice from partner level last week that: NO ONE will be cut, that the partners are taking less this year in order to keep things fluid, and that business will proceed and they will get through this tough time together.

My understanding is that the general pieces of how people were cut came from any or all of the following: performance, number of people in roles, length of employment, business need for the position or the group, overall ignorance by the GM and above, and some sheer bad luck in being in the wrong place at the time cuts were made. So if your history shows "weak" performance, or if you aren't in a vital product or group, or if they look at your org and see too many of your position or level - you could end up in the 3600.

Here is what March 24th looks like from here: All stock vesting ends on termination, no medical or dental insurance unless you pay to extend, all promises are expired, and you get to move on. No more direct deposit of pay on a nice regular basis. Some were allowed internal job search, but most were not. COBRA extension allows us to try and cough up over $1000 per month for medical alone, so the lack of benefits will be really tough, and we will try to pay this as long as we can. 401K is in the tanker, ESPP are all below purchase price (but with taxable events on the vanished "gain" from the time of purchase, should I sell) - obviously no captial gain, though. The apparently shattered lifestyle is taking us some time to get a grip on, and until the next job comes through, we are teetering between the past and unclear future. What is a necessity, what is merely nice-to-have, and what is a luxury? Things as simple as, should we drive through Wendy's because we are tired today, or is that wasteful, and should we eat at home. Do we keep making the 401K contributions at 6% so we get the match for these last few pay periods, or do we hold on to every penny to build up the checking account balance. How long will the cars last? Can we defer the student loan payments? Why-oh-why did we rip out the bathroom walls last month to get ready for long-planned new plumbing and a new tub and new tile - we will be looking at the plastic on the wall studs for a while now. Every planned expenditure is being scrutinized to see if we really need it or if it falls into the gigantic "luxury" category now. It's super weird, this limbo between the past and the end of the road with this company, and the insecurity feels really bad. Today was payday, and I still can't believe there won't be many more of them from MSFT. Even though I know I've got good education and have always been rated as a strong performer at work everywhere I have ever been, I would not have planned to be job hunting in this economic environment. There is a difference between finding a job of some sort, and replacing a well-paid career position - some of that depends on timing. I don't know if it's worse to be in the 1400, or to be waiting for an April cut to avoid having to pay bonuses, but I think would have rather had any amount of warning. If there really are so many people with all their finances in order to weather this sort of economic storm, I admire your discipline. We thought we were responsible, diligent savers, but I see it is not going to be enough. I read all the rumours before last Thursday, but I never imagined I was in the group to be laid off, so I hope some of the certainty voiced here by some has the merit to protect your future as surely as you expect. Mine is in shambles, but I am hopeful it will all somehow work out.

Anonymous said...

Next round of layoffs are going to hit in April.

While the primary thrust will be good attrition, there is talk that specific projects will be cut. For example, Zune Hardware Devices. The experience has evolved to DRM free songs on pretty much venue - amazon eg. so it can go any generic MP3 players

Server & Tools and Office will see pruning but it all depends on what the current quarter looks like. Server in particular has a lot of engineering resources and teams will be pruned on the basis of contribution to revenue

Client will not see cuts until Win7 Ships and then massive cuts.

Anonymous said...

(OP asks why to sign the severance agreement if expected severance is minimal)

>> Maybe because one has no legal basis for lawsuit, because it's more than they have to give anyone, because one has pride and dignity, because one does not have a narrow little mind ruled by filthy lucre?

Hey hey now. I'm not the OP, but where did "highest moral rightness" enter into the discussion, and why does a desire to maximize one's return using non-illegal means bring about value judgements? Why read "lawsuit" rather than "prefer not to agree to some of the other contract provisions that might limit them in the future in exchange for small severance" in to their words? Before January 22, I also saw fairness and politeness and moral good as part of the implied employer/employee agreement.

That was blown out of the water on January 22 by one big business decision that led to 1400 smaller but still significant ones, and not by the OP. I deeply regret that that happened, but it is what it is, and it's a new world of capitalism out there. Can we please keep this a business discussion.

I didn't see the agreement and am unaware of provisions that might affect those who sign it. The standard advice for contracts holds, and that is, if you don't like the terms, don't sign it. Negotiate it, return a copy with clauses struck out or modified, walk away, whatever you choose. They've given you the papers and the ball's in your court. And inaction itself is a choice.

Anonymous said...

why would someone whose severance beyond WARN pay is 20% of their waiting stock awards, sign? Inquiring minds would like to know.

Um, maybe because they know those stock awards are only "waiting" for people who are still employed by the company, and they just got laid off? Is this complicated?

Honestly, all lofty principles and visions of abstract justice aside, if you're among those who got RIFfed last week and there's cash sitting on the table, then hold your nose, sign the odious-but-hardly-atypical severance agreement they've foisted on you, and take the money. It's getting to be a cold world out there; you may need it before all is said and done.

The miniscule chance that you'll somehow prevail in some hypothetical future lawsuit claiming that you were singled out for special mistreatment during a time when hundreds of thousands of other people in this country are being laid off with pretty much the same deal you got (or in many cases, far worse) is not worth the money you'll have to leave behind in order to find out for certain. You'd have a better chance of profiting by taking the offered severance and blowing it all on Lotto tickets. I would strongly suggest you do neither, but simply bank the money and focus on the job you need to find next, rather than the one that's been taken from you.

These are bad times, the worst many of us have likely ever seen. For your own sake and your families' sake (where applicable), get real and do what you need to do to get through them. Tilt at windmills during the next boom, when you can better afford those sorts of luxuries.

Good luck to everyone going through this. May better days lie ahead for all of you.

Anonymous said...

To January 30, 2009 9:20:00 PM - My thoughts are with you, other members of the 1400, and your families. I hope you will find a viable path through these hard times.

My spouse is an engineer, and he arrived in WA state the same day that Boeing laid off tens of thousands of engineers in the 90s, but things worked out in the long run. Try to stay as focused yet flexible as you can, and keep networking.

Anonymous said...

>>don't panic!
>what if nothing has come up, the thousands of layoffs announced around the country have continued to escalate as they have during this week, and my family has no income? Hope your platitudes are helping me feel better by then, or I am counting my lucky stars that something worked out before the end of my pay and insurance coverage for my family.


Actually that comment was directed at those panicking who are still employed and paranoid about the hanging axe. The vast majority of current employees will not be laid off. Take action, sure, by saving money, networking, brushing up the resume, sure. But don't flip out and give up on doing your job, unless you /want/ to steer yourself into the RIF bin. And don't stress.

For your specific problems, and I apologize if this is callous, you might just have to learn to live with a lower income, take a contract position (there's a ton out there), or god forbid move somewhere you can afford on unemployment insurance.

Anonymous said...

It has been a week since town hall, and has anyone heard boo from Ballmer? It seems like we should hear more from the CEO in this time of crisis. Lisa is making an effort, or at least going through the motions, with her blog, but not so much from the very top. That’s hard to take, given the role that executive oversight contributed to our situation.

I know the economy is horrible, and I don’t need Captain Obvious to tell me that Microsoft is not immune. Companies worldwide are taking a hit, and my heart goes out to anyone affected, but some tech companies were better prepared than others.

If our leadership had been following the smartest economists, they could have better estimated earnings and slowed spending. They would have understood the continued softening in Europe and overall tightening of the credit market. So, WTF has been up with the ADHD growth? Heck, Paul Krugman of the NY Times predicted major fallout more than 5 years ago.

http://query.nytimes.com/gst/fullpage.html?res=9F0CE4D6103FF937A25753C1A9659C8B63&sec=&spon=&pagewanted=1

I understand the need to better align our business now, but it’s a bummer that employees in the wrong place at the wrong time (including strong performers) are getting the boot. If there were a clearer business strategy behind which positions were eliminated, and at least a symbolic gesture by execs to accept some pain, the situation would be easier to swallow.

We could also be handling the whole deal better, even for Layoff 1.0. (I know we've had reorgs before, but this is the first time I've seen external police officers in my building.) Letting rumors run rampant and leaving the rest of the employees twisting in the wind for Layoff 2.0 is ridiculous. These articles show alternatives:

http://online.wsj.com/video/pink-slip-etiquette/61C2B711-5953-4F13-A860-86DB79FFAB64.html

http://workforce.com/section/00/article/26/04/12.php

The lack of transparency is creating a rift that's almost beyond repair. The weeks of hearing nothing from within, followed by getting the news first from CNBC that fateful morning made a terrible day worse. If execs were under legal and compliance constraints prior to the earnings release, they could at least acknowledge this, and hop on the express bus to restoring communications. Perhaps Ballmer needs a standing "NOvation" from his troops to finally get it?

Anonymous said...

re: severance agreement

Hey hey now. I'm not the OP, but where did "highest moral rightness" enter into the discussion, and why does a desire to maximize one's return using non-illegal means bring about value judgements? Why read "lawsuit" rather than "prefer not to agree to some of the other contract provisions that might limit them in the future in exchange for small severance" in to their words? Before January 22, I also saw fairness and politeness and moral good as part of the implied employer/employee agreement.

...

I didn't see the agreement and am unaware of provisions that might affect those who sign it. The standard advice for contracts holds, and that is, if you don't like the terms, don't sign it. Negotiate it, return a copy with clauses struck out or modified, walk away, whatever you choose. They've given you the papers and the ball's in your court. And inaction itself is a choice.


Yes, I see your point. I had assumed lawsuit as the other option, based on other previous comments (apologies to OP if that was not the implied meaning)
. And yes I think bringing meritless lawsuits chasing after money is a moral low-ground. What do you contrive the severance agreement is limiting you to in the future in the first place?

Also note there is no implied employer/employee agreement between myself and Microsoft except the one I signed when hired, which states I am employed at MS' discretion and may be terminated at any time for any reason or no reason whatsoever. Nothing is implied in that agreement, it's quite explicit. I signed it; I'm living by its terms.

I am in the 1400 and I can tell you they will not accept any contract with strikeouts or amendments (it's printed in the agreement itself in some fashion). Whether they are open to printing a custom agreement after negotiation I do not know.

Anonymous said...

"The miniscule chance that you'll somehow prevail in some hypothetical future lawsuit claiming that you were singled out for special mistreatment during a time when hundreds of thousands of other people in this country are being laid off with pretty much the same deal you got (or in many cases, far worse) is not worth the money you'll have to leave behind in order to find out for certain. You'd have a better chance of profiting by taking the offered severance and blowing it all on Lotto tickets. I would strongly suggest you do neither, but simply bank the money and focus on the job you need to find next, rather than the one that's been taken from you.

These are bad times, the worst many of us have likely ever seen. For your own sake and your families' sake (where applicable), get real and do what you need to do to get through them. Tilt at windmills during the next boom, when you can better afford those sorts of luxuries."


Quoted for truth.

I was fortunate to be missed by the spotlight of RIF doom last week... but we lost a lot of people (many of them quite strong), and I ended-up with a new boss and a new job description that I find completely uninteresting and a serious step backwards in my career. For the first time ever at Microsoft, I didn't have a GM in my office trying to sell me on why this reorg was really a good thing for my career. Why? Because it's a new world and they know that at this moment in history, simply having a job is all the sales pitch most rational people need.

I'm a 64 in prod dev with a strong performance record, and although I think my new role sucks donkey balls I'm choosing not to whip-out the diva tactics just now. I'm going to look around externally for something better -- I have no special loyalty to MSFT and neither should you -- but I also realize that it's ugly all over, and the old "if you're good you can always find a job" mantra is temporarily on hold until the world gets its shit together.

Bottom line: now is not the time for righteous indignation and idle threats about lawsuits -- the courts are going to be flooded for the foreseeable future just trying to dig through the heinous cases of unlawful termination, and unless your case is truly extraordinary (and hint: the Microsoft layoffs are not) you will accomplish nothing other than wasting precious time and money you could have used in your job search.

Anonymous said...

At least they cancelled Think Week. Wait, is that a good thing?

Anonymous said...

Here are a couple of tips for 401(k).

1. If you are one of the 1400 or have 401(k) plans from previous employers, consider rolling over all of them into one rollover ira account with a broker. That way you have all your retirement savings in one place and you may gain some advantages you won't get with multiple smaller accounts.

2. If you are employed with Microsoft (or any other employer with a 401(k)), you can typically contribute up to 50% of your paycheck. If you don't need your entire paycheck right away, contribute as much as you can (up to 50% per paycheck; maxes out at about ~15K for one year) to 401(k). Three advantages to that approach: a) By front loading your 401(k) in the early part of the year, you have one less thing to think about if you are laid off later in the year; b) Markets are weak now, so save cash (contribute to a money mkt fund if you are not comfortable buying mutual funds) and buy whatever stock/funds you want when you feel comfortable; and c) Make this "upfront contribution" an annual ritual and your money is growing tax free for a longer time period.

Whatever you do, don't make the mistake of ignoring your 401(k). This is your retirement saving and you better have it under your control.

Anonymous said...


Anonymous, Friday, January 30, 2009 9:20:00 PM


Since these terrible layoffs have been announced, there have been 3 different posts on this blog, and hundreds of replies, not to mention all the stuff on local news, facebook, etc. I can honestly say that yours is the best post that I've read.

You come across as extremely genuine and truly put a human picture on the whole thing. I tried to put myself in your position. Just to realize that I have 3 more pay periods left, with benefits ending, all else drying up, looking for a new job in a horrible environment, and of course, the worst of all is the way the news was delivered on Thursday with absolutely no warning.

That Black Thursday will forever leave in infamy in my opinion, and those who point to it as the beginning of the end might be right. I'm truly sorry for what happened to you and the other 1399. I can only hope that things somehow get better for you and your family, and that goes for all the rest as well.

My morale has already been in the crapper since last week. While you folks are counting down to March 23, the rest of us are counting down to April, when the next set of cuts will hit. As of right now, I have no clue if I will be in that next group. March will be my 8th year anniversary at the company, so at least I can count of 4 months severance pay.
(6 if we get another 60 days due to WARN, assuming the next layoffs are > 500 people). At least we have a warning of sorts, something the first 1400 did not have. I will be going into April with a mindset that my job could very well end that month, and mentally, that will cushion the blow somewhat.

On the finances front, I'll be saving like crazy. I've already cut the 401k to 6% just to capture the company match, and all else is going to building my reserves. Luckily I have about $60K cash saved up, that's about 18 months expenses for me. Add the severance + unemployment, and I think I can go on for a couple of years before the sh*t hits the fan, so we'll see what happens.

I wish good luck to all my fellow MSFT'ers, and hope we can somehow weather this nasty storm.

Anonymous said...

If you're good enough, you'll find work.

Also, judging by 99% of the comments ever written to this blog, it's clear that MS is one of the worst possible places to work. You'd think people would be relieved to be leaving.

And no, I don't care about the economy because again, judging by the comments section, there are plenty of companies and start-ups out there that are still eating MS's lunch. You have Google, Apple, IBM...fucking FaceBook. Put your game face on and go knock on those doors.

Anonymous said...

You know, I have absolutley no idea why everybody's suddenly feeling sorry for those that got laid off. I mean, reading this comments section for the past few days it's become pretty clear that the people that are being laid off are top notch developers. In other words, these people are pretty quickly going to find work at GOOG or APPL or a start-up of some sort since the consensus also seems to be that people that leave MS invariably end up happier anyway.

Rather than feel sorry for them, wish them well on their new beginnings. Stop with the doom and gloom


Do you follow the industry at all? The companies that aren't laying off have hiring freezes. VC funds are drying up. There have been tens of thousands of skilled CS folks laid off in the last few months. It's getting worse, not better. Doom and gloom is not only warranted, any other reaction is naive.

Anonymous said...

I found out yesterday Jan 30, they obliterated the Storage Solutions Division Storage Evangelism Team. These guys were the SAN storage experts of Microsoft. I called in and was told the director and my contact services were no longer needed. Yet there is no official announcement to their demise from SSD management

So my question back to Microsoft is are you all giving up the SAN high ground to Linux and Unix? Is this an admission Microsoft and high speed storage don't mix? Where does that leave us partners who joined you in all those Building 20 plug-fests?

Anonymous said...

Why can't online BG employees give feedback about their managers and skip-levels during MYR this year? We wanted to provide feedback about our abusive manager.

Anonymous said...

@9:20

Thank you.

Much of the same is going on here. None of us is an idiot for ending up in this position, as some commenters have so graciously suggested.

...until the next job comes through, we are teetering between the past and unclear future. What is a necessity, what is merely nice-to-have, and what is a luxury? Things as simple as, should we drive through Wendy's because we are tired today, or is that wasteful, and should we eat at home. Do we keep making the 401K contributions at 6% so we get the match for these last few pay periods, or do we hold on to every penny to build up the checking account balance. How long will the cars last? Can we defer the student loan payments? Why-oh-why did we rip out the bathroom walls last month to get ready for long-planned new plumbing and a new tub and new tile - we will be looking at the plastic on the wall studs for a while now. Every planned expenditure is being scrutinized to see if we really need it or if it falls into the gigantic "luxury" category now.

I've had the "Wendy's discussion" with my family. We quickly dropped to one meal out per week, and it's somewhere that offers free meals for kids on a given night.

I cut some low-hanging fruit out of the budget and will reevaluate our circumstances every week. As need be, I'll cut more.

I changed my 401(k) contribution to get the maximum match for the duration, but anything above that now goes straight into the checking account.

I hadn't contemplated deferment of the student loans but am thankful you pointed it out. It may be worth researching.

I also have one of those "why-oh-why" stories, but I'm thankful I'm not the 1,400 colleague who has a baby due any day now.

I have the emergency fund (six months of salary), but there are no certainties in this market. The COBRA gross-up covers the family for health needs, and for the short term, that's a relief. However, I have to move to find similar work, and that means selling a house. If it sells, my family is OK. If not, do I raid retirement savings? Wipe out the kids' college accounts? As if the past two years of stock market freefall didn't wipe out these savings enough.

Even though I know I've got good education and have always been rated as a strong performer at work everywhere I have ever been, I would not have planned to be job hunting in this economic environment. There is a difference between finding a job of some sort, and replacing a well-paid career position - some of that depends on timing.

I'm glad I'm not the only one in this exact same place.

I read all the rumours before last Thursday, but I never imagined I was in the group to be laid off, so I hope some of the certainty voiced here by some has the merit to protect your future as surely as you expect. Mine is in shambles, but I am hopeful it will all somehow work out.

You're not alone. I get it. I really get it. I wish no one else were in the situation of having to get it at some point in the future (with some perhaps obvious exceptions).

Best of luck to you. May one of those leads come through in a big way for you. For all of us.

Anonymous said...

Jeez, you guys are a bunch of pussies. About five years ago, my manager at the time (a great guy, and a good friend to this day) saw a problem with me - I didn't have a network. I took his advice to heart and started giving more attention to the relationships I build with people.

That advice has recently paid off. I wasn't laid off, I left on my own volition and got a 25% pay RAISE. Well, OK, in reality it's more like 20% raise, because benefits aren't as good, but still. It would take me three years (more, now that salaries are frozen) to get to the same compensation at MSFT. And by golly, I'm not going back if they at least match it, once the crisis blows over.

All of this because I made a good impression on someone and they recommended me to their friends.

Moral of the story - know your shit, and don't be an asshole to people.

Anonymous said...

"It doesn’t make any sense to fire someone because of the vista status"

thanks for your input BrianV.

Anonymous said...

@Friday, January 30, 2009 9:20:00 PM

I'm sorry you're freaking out, but seriously, you need to take some interest in your own money.

I don't know your exact circumstances but COBRA is generally not a very competitive health insurance option and it's not necessarily suited to your needs. Unless a member of your family is very difficult to insure, you should be looking elsewhere. Your options are not COBRA or nothing.

And why are you talking about diverting money to a checking account? Plenty of banks offer FDIC-insured savings accounts that yield > 2.5%. Chesapeake Bank is at 3.75% with a minimum balance of $1.

I know you can't do anything about these now but your 401k should not be doing that badly and you shouldn't have been holding any significant amount of ESPP.

You don't have to be an "expert" to manage your personal finances effectively but it does take a basic level of interest and knowledge.

Anonymous said...

Microsoft Microsoft Microsoft

Well, I guess this is what comes from having a business school drop-out run a Fortune 100 company. Maybe a couple of additional semesters at Stanford would have kept us out of this situation. Two courses he must have slept through or missed out on: Change Management and Strategic Planning, but I digress.

This whole situation sucks: It sucks for the 1400, it sucks if there really are 3600 to come, it sucks for those who remain at Microsoft who will now being doing the jobs of what two people used to be doing and burning out in 1-2 years, It sucks for the kids of employees who’s parents are stressed out, sucks for the community-I could go on for hours.

Instead of sitting around complaining about it, perhaps we should recommend some solutions. I always tell my kids when they come to me complaining about something, that I don’t want to hear their complaints-I want to hear their idea/solution to the problems. We’re looking for great problem solvers at Microsoft, so let’s problem solve.

I’ll get us started with one suggestion. For the 1400 who have been let go: Why don’t you all get together and start your own company? Facebook has already started a group for the Microsoft 1400-bond there. If Microsoft really hires the “best and the brightest” then this group of 1400 should have no trouble getting investing to start their own company-aren’t start-up’s thriving again? After all, the company was naïve enough to layoff Marketing, Finance, Business Management, HR, IT, PM’s, Testers and Developers all at the same time. It’s much more productive than worrying about filing a lawsuit that you may not win. You could find a nice, less expensive place in California along the ocean and start 3.0 development-or whatever you want. You may or may not have 3600 others joining you soon.

I’m sure there are other solutions out there, but IMHO instead of arguing back and forth with one another-developing positive solutions might help out the 1400 and anymore to come. I know there’s been a few other positive solutions out there-let’s keep these coming.

Anonymous said...

Here's a suggestion for axing the next 3600: The SQL UE team. All they do is reformat the PM specs. They wait till the last minute - claiming they are working on some other project - and then all they have time left is to reformat the specs.

Judging from the quality of DevDiv documentation, their UE team should go too.

Anonymous said...

Anyone has any insider info as to when the next round of layoffs are coming. I read it might come in april, but can someone with reliable sources confirm??

The anticipation is killing me.

Anonymous said...

a week after our GM announced no layoffs for our team. A guy was riffed ... so while it is a subtle difference between use of terms .. the "no layoff message" is to cover a) performance related RIFs, b) general non-sensicle personality and c) non-favorite flags..

Anonymous said...

I think layoffs are great. By firing less than expected/usual attrition all those lazy suckers who are not pushing themselves are being kept on their toes. And if you're worried about loosing your job it either means that you're weak performer/lazy smart ass or you one of those guys who stay in the office for 80 hrs a week but no one know what they're doing. If your team got cut but you're a top performer you won't have any problems finding another team at Microsoft that will be more than willing to hire you.

Anonymous said...

Just curious how many people were terminated on Friday. I know of 2 different folks in different organizations that were let go on Friday the 30th. From the external perspective, they seemed to be performance related. These were folks that everyone wondered why they had not been let go the week before.

Anonymous said...

One pesrson from my division (STB) was let go on Friday (30th). He does not have the 60 day job search option and no corporate acess

Anonymous said...

"I always tell my kids when they come to me complaining about something, that I don’t want to hear their complaints-I want to hear their idea/solution to the problems. We’re looking for great problem solvers at Microsoft, so let’s problem solve."

What if you are an abusive parent? What is the point to bring up a solution to you? The abused children should get the support from outside. BTW, at good time, top executives told you “we are family”. At bad time, they tell you “you are a low performer or the company is not immune”. They change the tone like the mood of the abusive parents. How can you have a strong bonded family and how can you have satisfactory customers with such culture and environment. Microsoft has a culture problem not a performance problem. The performance is the result of its culture. Your advice is like why abused kids can’t just start their own families. It does not sound fair to me.

Anonymous said...

Just curious how many people were terminated on Friday

---

i know of 3 in STB on friday .. one was really coming for awhile ... the other two, well, were not obvious.

Anonymous said...

I just want to point out that I was right.

I love the way Microsoft's leadership is handling this. Finally something to motivate the employees, Sword of Damocles-style. No bonuses this year, but most of you are going to work harder than ever to avoid being cut.

And Microsoft, normally so inept at messaging, really nailed this one: 5000 employees laid off, big and round enough to be the number everyone's repeating ... even though only 1400 are now, and over half of those were actually just open positions that won't be filled. With a lever smaller than 700 pink slips, they've moved the whole company. Bravo!

Anonymous said...

What is KT's org responsible for? A very big org, bigger thn all product groups put together.

Anonymous said...

The miniscule chance that you'll somehow prevail in some hypothetical future lawsuit claiming that you were singled out for special mistreatment during a time when hundreds of thousands of other people in this country are being laid off with pretty much the same deal you got (or in many cases, far worse) is not worth the money you'll have to leave behind in order to find out for certain. You'd have a better chance of profiting by taking the offered severance and blowing it all on Lotto tickets.

I did not get laid off yet (I am losing sleep about the next round! April?). But a great guy I worked with was the only lay off under my GM. He was "special" for more than one specific personal reasons, which are not common traits (or not commonly known to be common). He seems to have been singled out for "being who he is". His managers were aware of his "differences".

His work was of outstanding quality. He was loved by everyone who talked with him. Customers and partners loved him too. He worked hard even when he was sick because he loved what he did. People around the company wanted to meet with him to learn from his experiences. Even after his lay off, people still want to learn from him. He was not very old either, only in his mid-late 30s, but he is brilliant!

When he was around, I felt I could not compete with him for the promotions. Now he is gone and I realize that he was genuine, and that he has a genuine case to file a lawsuit. He may have been chosen because he was "different" in more than one way.


I would strongly suggest you do neither, but simply bank the money and focus on the job you need to find next, rather than the one that's been taken from you.

I agree in general. There are some exceptions.

Anonymous said...

Anyone has any insider info as to when the next round of layoffs are coming. I read it might come in april, but can someone with reliable sources confirm??


You should no better than to trust what you read on this blog.

Mini - Please CRF rumors unless people are willing to give you their email addresses and you confirm them. We do not need more panic.

Anonymous said...

I heard someone mention that double-10%ers will be given some sort of notice on Monday.

Why do we even have double 10%ers still here? Shouldn't they get sacked after under performing 2 years in a row?

Anonymous said...

SAP joins IBM, Apple, Google, and even Yahoo in the beat earnings category. Revenue was short, but still 8% growth. Very different approach for handling 3000 announced layoffs:

"As SAP is a global company, we will consider each region and each line of business at all levels. We are looking for fair solutions according to accepted practice, and we will make this process as transparent as possible. We owe this to our employees. We plan to reduce the number of positions globally from 51,500 to 48,500, taking full advantage of attrition as a factor to reach this goal."


That approach might be better, but it is still not great. We know that layoffs are to be avoided, but realistically speaking, the reduction will not be possible based on attrition alone. Therefore we do not even know what the real probability for being laid off is. One year of horror... brilliant.

SAP and MS seem to have a lot in common. In fact, in some aspects SAP follows MS. Without learning, that is. MS has shown the world that a sales guy at the head of a tech company is a baaaad idea. And what does SAP do? Promote a sales guy to the top job.

At least your overhyped shoe salesman had the decency to preserve the founder-based corporate culture for a few years before announcing big cuts in the workforce. Our overhyped shoe salesman couldn’t even wait until he was sole CEO in April before doing so! And yes, it is definitely Leo Apothekers handwriting on the wall, not (departing) Henning Kagermanns.

Our CEO shares the knowledge, wisdom and vision with yours... great, really great. SAP used to be a very special company to work for. Now? Now it is nothing but a good place to work, but an ordinary company nevertheless. In the past, people would stay for the sake of it. From now on, people will be ready to swap employers if someone offers a better package. So far, attrition is 2.5% in Germany, but I expect a sharp increase once the economic situation improves. Talk about shooting oneself in the foot... because this will be bad attrition, of course.

Mini, you provide a great service to MS employees, especially in these times. At SAP we do not have a Mini. Could I ask you a favor? Could you write a post that is dedicated to SAP (maybe just a headline and a paragraph describing that this one is for SAP employees to exchange), so that we can use the comment section of this post to exchange information on our particular situation?

Also, another posting "how to stay anonymous as a blogger" would be appreciated, so that someone on our side can pick up the burden and become SAPs Mini.

Anonymous said...

I'm a Principal, but haven't done jack for over 10 years. I often put a sign on my door saying "busy" when I'm actually at home doing other things. My team was dumb enough to promote me to Principal a few months ago: life is beautiful!

Anonymous said...

I don't mind layoffs. But the stress of not knowing when it will happen(April???) and whether I will be impacted is killing me. Cut once, cut deep and get done with it so that everyone else can get on with their life. This whole thing is messed up.

Anonymous said...

Anonymous @ Saturday 9:38:00 PM
With a lever smaller than 700 pink slips, they've moved the whole company. Bravo!

They've moved the company all right, but in which direction?

They changed the game - at least with the 10% and Up or Out you knew where you stood (excepting bad luck in getting a bad manager).

If they'd have said "we're cutting the bottom 10% of both the employees and the products in the company", most employees would have seen the logic in that.

Now even high performers have to wonder if they'll be kicked out of the company because of some random management decision.

The SLT has sent a message that should have been clear for a while, but that the mythology of the early days of the company obscured.

That message is:

In the 21st century, Microsoft is a large unwieldy corporation. It doesn't care about you. It is not a family. Treat the company as it treats it's employees - as something to be used for profit, until something better comes along.

Anonymous said...

Why is the economy sinking? Why will it continue to sink? Please read:

Carroll Quigley, "Tragedy and Hope"
Cleon Skousen, "The Naked Capitalist"
Daniel Estulin, "The True Story of the Bilderberg Group"

One also has to wonder why our Beloved Bill has built a "Doomsday Seed Vault" in the Arctic -- read more at http://www.globalresearch.ca/index.php?context=va&aid=7529

Truth is stranger than fiction, indeed.

Anonymous said...

Why do we even have double 10%ers still here? Shouldn't they get sacked after under performing 2 years in a row?

Getting a 10% is not "underperforming." It means that you don't (in your current manager's estimation - which makes all the difference in the world, as has been stated here repeatedly) have much or any "upward potential." You can get an Exceeded and a 10% in the same review cycle. Not that likely but it's possible.

So don't lump the 10%ers in with the "Not meeting expectations" folks. Two different bags of worms. You'll especially appreciate this the first time you get a 10% because you haven't been promoted fast enough. Nearly everyone will hit that point eventually unless the system changes, because after all, promotions are a pyramid that we can't all climb or we'd get too top-heavy.

Anonymous said...

"Why do we even have double 10%ers still here? Shouldn't they get sacked after under performing 2 years in a row?"

You have no idea how hard it is to fire someone around here.

Anonymous said...

I'm a Principal, but haven't done jack for over 10 years. I often put a sign on my door saying "busy" when I'm actually at home doing other things. My team was dumb enough to promote me to Principal a few months ago: life is beautiful!

Troll.

But a great guy I worked with was the only lay off under my GM. He was "special" for more than one specific personal reasons, which are not common traits (or not commonly known to be common). He seems to have been singled out for "being who he is". His managers were aware of his "differences".

If he was highly promoted and highly liked, I honestly doubt that he was sacked for any differences. There were a lot of very talented people with a strong track record that were part of the 1400 - your friend is not unique, and from the sounds of it, almost certainly not discriminated against. But hey, he can lose his severance and take it to court if he thinks that he was deliberately targeted - that's his prerogative.

Anonymous said...

If they'd have said "we're cutting the bottom 10% of both the employees and the products in the company", most employees would have seen the logic in that.

Now even high performers have to wonder if they'll be kicked out of the company because of some random management decision

---

Problem is you can't have your cake and eat it too.

typically it's been keep non-profitable groups alive but trim 10% accross the company. That has to change and is.

Now if your product or division is not living up to expectations it is accountable business to remove or no longer invest there.

Other companies do this kind of cut all the time. It is not the MS culture and the fact you don't realize this tells all of us you have been a college hire and no of nothing else except life at Microsoft. Not that is an overly bad thing, but it is a reality and why of the 1400 people who are now out of work, some are going to really be in for a shocker.

Anonymous said...

"As long as you start that new outside job after your 60 days, you won't be penalized on the severance. I've had nice long conversations with my HR rep about this. If you start the new outside job within the 60 days, then you're subject to the moonlighting policy."

> This is partially correct. Certain companies such as subsidiaries of MS or companies in which MS has a 20% or greater stake in (which is not always obvious) will cause you to lose the whole package. Look into a company carefully!

I make up that we'll have to talk to our HR rep about the company to ensure they are not a "subsidiary".

Anonymous said...

Wait a sec, so, only 700 people were actually laid off on the
22nd? This is the first I'm hearing about that. I thought it really was 1400 people, not 700 + 700 infilled open positions.

Also, what is going on here with individuals being laid off each week? Do we now go to work every day not knowing what the heck is going to happen?

FWIW, A/70 here with a promo last time around, not that it means anything.

Anonymous said...

TechReady is here again bringing thousands of MS employees from all around the world here. I wonder how much this kinda event cost ??

Anonymous said...

Getting a 10% is not "underperforming." It means that you don't (in your current manager's estimation - which makes all the difference in the world, as has been stated here repeatedly) have much or any "upward potential."

Thanks for finally setting the record straight. I was beginning to get irritated. You'd think after 3 (or is it 4) years of this crummy system people would have it figured out.
The 20, 70, 10 is your "contribution margin" or plainly stated what the company thinks your future potential is. This is also how you are stacked for stock awards.

Maybe those consistently referring to 10%’rs as useless drags on the company are actually Trolls who don’t understand the system. Further anyone who has had significant experience with the Microsoft review system knows that the slightest falter in your performance during the year is the fodder used to push you from the 20% to 70% bucket; from the 70% to the 10% bucket so they can complete their bell curve distribution.

Signed “Achieved – 10%”

Anonymous said...

Time to change exec compensation?

http://www.msnbc.msn.com/id/28964357/

Interesting to see the small cuts that these execs are making when their companies are tanking. Why should you get a bonus at all if your sales are down 16% and profits are down 44%? The guy got a $650k INCENTIVE bonus for that. Most sales folks would be fired for that sort of performance.

It'll be interesting to see what we do here.

Someone should hint to Steve that Google is about to do this. Then he'll think it's the greatest idea ever.

Anonymous said...

Anonymous @ Feb 01, 3:28:00 PM:
If they'd have said "we're cutting the bottom 10% of both the employees and the products in the company", most employees would have seen the logic in that.

Now even high performers have to wonder if they'll be kicked out of the company because of some random management decision.

Anonymous @ Feb 01, 7:53:00 PM:

Problem is you can't have your cake and eat it too.


--

I'm the OP (not a lifelong msft employee). That was poor juxtapositioning of those two statements on my part. I actually agree with you.

Upon hearing there were layoffs, I expected to see the usual industry standard "as part of realignment, we're closing / selling the following poor performing (or non-strategic) business units / products".

There have been RIFs at microsoft in the past. Some reorg happens, a product is scaled back, the best people get to find another job inside the company, the rest get a lovely severance parting gift. Pretty standard stuff.

But this time, so far, all we've got are what looks to be random layoffs of some good and bad performers spread out over random parts of the company (even some that are doing well), followed by 18 months of good attrition (every group, it seems).

That's what is so mystifying: we're getting the message that anyone is expendable, but for no reason or direction in the cuts.

If the economy really is going to hell, why isn't the company rallying around the core businesses (and core investments), getting rid of anything not critical - getting down to fighting trim?

Actually, that should be our default state of mind. And I guess that's the reason min-msft exists.

Anonymous said...

The book 'Web of Debt' ( webofdebt.com ) by Ellen Brown and the articles on her website talk about the Federal Reserve and the estimated $180 trillion in derivatives created from bad mortgages.

Shifting $180 trillion in bad debts onto taxpayers isn't going to work. There is no way to pay back that debt.

The gross domestic product of all the countries in the world is about $60 trillion.

Steve might end up feeling more than the breeze of 3600 shoes flying past his head.

Anonymous said...

Ballmer and HR team:

Here's THE BEST option for next round of layoff. It comes with a 100% satisfaction guarantee that nothing would be disturbed whatsoever plus the comfort that you would be firing moderately well off employees who have a price tag that surprises themselves (avg FTE cost of $350K+). I know you are amused how is it possible that this group exist and you haven't even heard about it. So let me tell you the secret:

There is a org in MSIT called "Solution Delivery" or SDs. Most of this org is made up of L65+ people. They do not write any code. They do not test anything. Heck, they don't even write any specs! I know you are now even more amused. What they do then?

That's the question no one had been able to answer. I'm not joking. Stuart Scott (our ex-COO) created this org because he thought MSIT engineering always had conflict with internal "business partners". So he created this org which would act as "middle man" when such conflict occurs. But still he had hard time to justify hiring these legions of L65+ who are neither Product Manager nor sales nor marketing nor PM nor dev or test. I remember he called several meetings just to "clarify" SD role but neither people in engineering nor in business gets the purpose of their role even today.

Let me repeat: There is no one is MSIT I know who thinks that SD had any contribution to success of any projects at MSIT. If you go to your VPs and GMs you will hear the bullshit about why they are required.

I know that no manager in MSIT wants to contract their empire that they have built after so much effort despite the fact that they are cost center. In MSIT manager's strength and influence is determined by how many people they manage. A manager with org of 100 is far more "smarter" than manager at same level but with org of only 50. Therefor mo manager in their right mind wants to loose even a single head even if they know they have 2X to 3X required capacity.

Anyway, back to SDs. Other day someone told me an internal joke about this SD role as "Microsoft Paid Retirement Program". LOL! Most people in this role are 40+ and they appear to have taken this "job" because it's a paid alternative to retirement :). In neither cases you have to do any work ;).

In past two years the SD group size has ballooned in classic MSIT empire building style. If I was in MBA program I would make this as my case study project.

If this message doesn't get to anyone and if this role doesn't get eliminated then also it's well and good. I fully plan to join this org at 40 as my early retirement plan :).

Anonymous said...

Nearly everyone will hit that point eventually unless the system changes, because after all, promotions are a pyramid that we can't all climb or we'd get too top-heavy.

Obviously,you don't think that Microsoft is already too top-heavy with middle-managers. What's your take on the ratio of 'producers' to 'administrators'?

Anonymous said...

FWIW, A/70 here with a promo last time around, not that it means anything.

E/20 here with a promo last time around. It meant nothing when I got tossed into the 1400.

Anonymous said...

SD is definately under some pressure... ASM is laying seige to part of their role which will greatly undermine thier existance if ASM gets what they want. The bad news is if ASM gets what they want it is just robbing one senseless empire to give to another...

I'd prefer to see a giant screw turned on our entire LOB portfolio and trim 20-30% of the SD/COE/ASM headcount.

Anonymous said...

I left Microsoft a couple of years ago after working for a long time and I really feel sorry for all my friends who are still at Microsoft and going through this pain. Here is some advice I can give you.

Your biggest enemy is not Microsoft, it is the great unknown.
I never felt secure at work and saved all my money (except for 6% contribution to 401-K). I even argued with my wife of buying my house for 190,000 $ in 1997 because I thought it is expensive, before eventually giving in. I know most of you lived in an imaginary world and believed everything will work out and spent every penny you can think of. World is lot more unsecure now and it is possible we may not get out from this economic downturn for many years. If I were you, I would be lot more careful about making yet more optimistic assumptions on the future and be sorry later.

You should save every penny you can now and don't put more than 6% into your 401-k. Do you believe your taxes will be lower or stay same in the future? I think not, with federal deficit will be staying so high for many many years, higher taxes would be a sure thing. Your 401-k contribution wouldn't be that valuble if taxes are higher in the future. Also, having money avilable in taxable account looks like a much safer thing if you cannot find a job for a long time.

Don't think Microsoft or any other company will provide you security for the future, it is you yourself can provide the security of your future.

If you are laid off and if your family has any pre-existing medical condition, make all the efforts to continue your medical insurance. You don't have to pay for COBRA payments for 60 days (read your material you got). That means, you don't have to pay until May 23. COBRA gives you 60 days to choose and if you send the payment by the deadline they still have to continue your medical insurance, but you have to pay for the period from March 23. This means if you can find a job within 4 months and the new job pays for the medical insurance you don't have to pay for COBRA. If you have a discontinuation in medical insurance, some companies require you to wait for 30 days or something before coverage kicks in. If that is the case, buy a short term insurance (expires in 3 months) until the coverage kicks in which is so cheap. Again, if your family has existing medical conditions, you may have to analyze what is the best option for you.

Anonymous said...

The book 'Web of Debt' ( webofdebt.com ) by Ellen Brown and the articles on her website talk about the Federal Reserve and the estimated $180 trillion in derivatives created from bad mortgages.

Shifting $180 trillion in bad debts onto taxpayers isn't going to work. There is no way to pay back that debt.

The gross domestic product of all the countries in the world is about $60 trillion.


Wow, wow, wait a minute. The $180 Trillion you are referring to is NOTIONAL amount, not the real amount. A bank may have two positions of $1 billion each that practically cancel each other out, but that is reported as $2 billion of notional exposure although the real exposure is close to 0 (because the positions are on the opposite side of the same bet). This is not the place to get into more details about this, but don't go off dropping FUD bombs in a theatre filled with already scared people.

If you truly didn't know that the 180 Trillion dollar number you cited was notional, as opposed to real dollars, then you should spend a lot more time catching up on the derivatives problems.

Anonymous said...

Mini,
You have been pretty vocal about cutting Microsoft's flab and put the brakes on our hiring. However, you have not said much about breaking up Microsoft into smaller companies. Do you have a take on that?

Back in the DoJ days, we ditched the idea of breaking up MSFT in order to facilitate synergies among different products. However, this is obviously not working as we keep re-inventing the product through multiple teams that essentially do the same thing.

Would it help if we broke the company into smaller pieces? That way, of the Online services team report a loss, it will look bad for that company, but the client team will look alright. Your thoughts?

Anonymous said...

On a totally different topic, I have been using Live.com for the last few days? I am seeing lot of good things on that site. Are those people okay? I hope they are ...

Anonymous said...

Obviously,you don't think that Microsoft is already too top-heavy with middle-managers. What's your take on the ratio of 'producers' to 'administrators'?

OP here. Yes, I do think we have too much middle management. But this "up or out" policy hugely increases the problem by institutionalizing it. I shake my head how Ballmer or anyone else can rationalize this kind of scheme. I mean, I know he's in marketing, but didn't he take *some* math in there somewhere?

Anonymous said...

A manager surrounds himself with extra headcount to preserve his mini-kingdom in MS. That manager relys on his direct reports to give him great WHI marks and help him keep his job. WHI is anonymous... sure it is.

That manager is told to cut somone. The choice breaks down to an employee that has worked from him for 10 years and is at best an average performer but alwasy gives the manager great WHI marks and never makes any waves. The other choice is a new hot blooded, fire-breathing talented coder out to change the world.

The best choice for Microsoft is to keep the talent. The best choice for the manager is to keep the employee that helps keep him safe. Who do you think gets a pink slip? The manager has a wife and kids to think about, the choice doesn't make him a bad guy it makes him a human being.

All middle tear MS managers who have been in the same role for 5+ years should be compelled to do something new, or do something elsewhere to break up these fiefdoms.

Anonymous said...

When someone shouted on stage: I love this company, I love this company, I love this company. It was all a lie. If 'someone' really loves this company, 'someone' should lay oneself off now, and not a second too soon! 'Someone', lack of any vision, should take the responsibility for changin MS into a bloated, in-efficient organization it is today!

Anonymous said...

There is a org in MSIT called "Solution Delivery" or SDs. Most of this org is made up of L65+ people. They do not write any code. They do not test anything. Heck, they don't even write any specs! I know you are now even more amused. What they do then?

Amen. We should shed some light on some of these odd-looking orgs in MSIT. I always looked at them as the boneyard of the company, but the fact that they managed to weather this storm so well is puzzling.

Anonymous said...

Someone just brought up the costs associated with TechEd. I have a related anecdote to pass on:

As most of you know the TechReady flocks have flown in from all the worldwide subsidiaries. Among them are 2 old friends of mine, who took a brief leave from their stays at the expensive downtown hotels to visit me recently (at different times).

During both conversations the cost cutting issue came up, and their per-diem... Ironically both individuals were of the opinion that it's not only perfectly OK, but actually their privilege to spend their daily allowance to the limit if necessary by wrapping up the day with an expensive dinner.

I do understand these are minor perks that are almost standard in the industry to keep some folks motivated. But I'm having a hard time understanding the abusive mentality of pushing it to the limit even if there's no need?

Based on these and other anecdotal evidence, I fear this might be the default attitude among many folks out there, possibly including things bigger than those dinners...

Anonymous said...

"A manager surrounds himself with extra headcount to preserve his mini-kingdom in MS. That manager relys on his direct reports to give him great WHI marks and help him keep his job. WHI is anonymous... sure it is.

That manager is told to cut somone. The choice breaks down to an employee that has worked from him for 10 years and is at best an average performer but alwasy gives the manager great WHI marks and never makes any waves. The other choice is a new hot blooded, fire-breathing talented coder out to change the world.

The best choice for Microsoft is to keep the talent. The best choice for the manager is to keep the employee that helps keep him safe. Who do you think gets a pink slip? The manager has a wife and kids to think about, the choice doesn't make him a bad guy it makes him a human being.

All middle tear MS managers who have been in the same role for 5+ years should be compelled to do something new, or do something elsewhere to break up these fiefdoms.


I find this generally laughable and naive, and it sounds like sour grapes. There are plenty of legitimate complaints, but the "bad managers will keep bad people who inflate their OHI over super-talent who doesn't" schtick is nonsensical.

First of all: most teams don't reall give a shit about OHI other than as one more checkbox to fill-out for overall reporting. OHI is certainly not important enough in the grand scheme of things to trump the 30 or so other things managers are reviewed on -- like productivity, for example. Case in point: I've had shitty managers at Microsoft -- some of them were unbelievably talentless at anything other than sucking up -- and I always told it *exactly* like it was without excessive varnish. I'm also insanely productive and I'm generally on-fire, and so I've always stacked well... because at the end of the day these douchebags know where their bread is buttered. HINT: it's not some stupid OHI form.

When I think back to people who have worked for me and have shared this point of view, it's usually someone who's ego is way out of touch with reality, and who thinks they're hot shit and OMG A ROCKSTAR HELD BACK BY THE EVIL MAN when really they kind of suck, can't work in a team environment, frequently do the wrong thing and won't listen to reason, etc.

Anonymous said...

"I shake my head how Ballmer or anyone else can rationalize this kind of scheme. I mean, I know he's in marketing, but didn't he take *some* math in there somewhere?"

Does a perfect SAT score in math and scholarship to Harvard count?

Anonymous said...

If you truly didn't know that the 180 Trillion dollar number you cited was notional, as opposed to real dollars, then you should spend a lot more time catching up on the derivatives problems.

Yeah, it's not real until the underlying asset goes pfft! Keeping telling yourself it's just play money.

The JPM Derivatives Monster

We believe that JPM's management is taking a mammoth gamble with the wealth of its shareholders by supporting derivatives with a notional value of over $26 TRILLION dollars with a relatively trifling $42 billion of shareholder equity. Any discontinuous market volatility event that is unforeseen and beyond JPM management's control could conceivably cause this immense pyramid to rapidly unwind, utterly annihilating the company's capital in a matter of days or weeks.

Adam Hamilton, CPA, MCSE
7 September 2001

US bites the bullet with an 'aggressive' $250bn bank bail-out

Wednesday 15 October 2008

Although the treasury disclosed no figures, an industry source said the biggest investments of $25bn each will be in JP Morgan, Citigroup and Bank of America. Some $20bn will go into Wells Fargo, $10bn each into Morgan Stanley and Goldman Sachs, and $3bn apiece will go to State Street and Bank of New York.

Anonymous said...

To the person who recommended cutting SD and thinks that SD does not add any value, I would encourage you to go speak with MSIT's business partners and IT's internal teams like COE, ASM etc., they would tell you of the value SD adds to the IT Delivery. Not sure about your expereinces but don't try to generalize entire organization based on your own personal experience.

Anonymous said...

Well i got the door today.

random.

STB just after the townhall.

Anonymous said...

I was just at a "money saving" site, and I was surprised by one of the forum headlines: "Couldn't find dead roses? Get your ex a Zune for Valentines day"

First Vista became a joke, and now the Zune.

I hate to see our brands being dumped on. So ... is it the marketing or the products?

Link: http://www.fatwallet.com/forums/hot-deals/900654/

Anonymous said...

I hate to see our brands being dumped on. So ... is it the marketing or the products?

1.) When you're king of the hill everyone wants to knock you down.

2.) Microsoft's arrogance over the years makes it everyone's favorite company to hate. I think the publicity surrounding the DOJ antitrust trial played a huge role in damaging Microsoft's brand.

Anonymous said...

First Vista became a joke, and now the Zune.

I hate to see our brands being dumped on. So ... is it the marketing or the products?


People love their iPods.

No company can expect to depart radically from their core business, take a recycled Toshiba Gigabeat, apply a liberal coat of faux-hip marketing, and expect it to compete with a cultural icon/status symbol. Of course it's inspiring some level of confusion and resentment from the hundreds of millions of people who love iPods.

If, say, Boeing had decided to make the Zune instead of Microsoft, we'd all be laughing too. It makes about as much sense.

Same problem with Windows Live (Live Search? Live? Microsoft Live? What is MSFT's internet search thing called again?) vs. Google?

Anonymous said...

Dear Monday, February 02, 2009 10:34:00 PM. Are you sure you are not an OHI form?

Honestly, whoever has been around Microsoft for a while has seen a manager surrounded by people that just protect their (feed)back. From people that share nationalities to others that come from the same fraternity, you will see all kinds of groups moving together around the company.

Have you notice what happens in acquisitions? Microsoft acquires a company, and just before the acquisition the salaries of everyone in the company are adjusted, and they come into Microsoft at high levels. A few months pass, and you see that entire team that was very valuable due to their expertise in the acquired company just move away to some other area. You then have people that never succeeded in a single Microsoft interview working in an area in which they don’t have experience, at very high levels. Never saw it?

And what about Microsoft HR? Who hires those guys? LisaB probably thinks that meeting the diversity goals means hiring crazy people into HR, because that is literally what is happening.

Anonymous said...

Yeah, it's not real until the underlying asset goes pfft! Keeping telling yourself it's just play money.

You completely misunderstood me. I already provided an example of what notional vs real exposure means. I'll repeat with a little more detail.

Say a bank makes a currency bet against the Euro (short position) to the tune of 1 Billion Dollars. The same bank, say, also makes a bet in favor of the Euro (long position) to the tune of 1 Billion Dollars. The bank is only obliged to report the total exposure of its positions, not the details of its individual positions. So, in this case, the banks simply reports that it has 2 Billion Dollar exposure. That's the notional exposure. In reality, their two positions are canceling each other out, so their net exposure is close to 0.

The problem with such derivatives is twofold. One is that there are large positions based on poor assumptions and the insurance agencies who underwrite these bets are not big enough to pay up when asked to do so (remember AIG).

The second is the reporting structure. They are only obliged to report the sum total of their notional exposure, so no one outside the bank knows what individual positions the bank actually has. The reason is, if the banks disclose their positions, their competitors will take advantage of that knowledge. So each bank doesn't know the details of other banks' derivatives exposure. So, on the whole, all we know is the notional exposure of all the banks. Reality is many of these positions are on the opposite side of each other, effectively canceling themselves.

Yes we have a problem with derivatives and that has been playing out. But be careful tossing out numbers such as 180 Trillion Dollar exposure, because that is exposure in notional dollars, not real dollars. No one knows the real exposure in these derivative positions because of the lack of disclosure. The real exposure is only a fraction because of hedging (the long vs short position on the Euro as in the above example).

There's a difference between 180 Trillion Dollars and a small fraction of that (whatever that is). For comparison, bank losses are estimated to be in the 3 to 4 trillion dollar range (from Roubini).

If a travel web site sells 100 airline tickets at $100 each, their revenue is not 10,000. Assuming they are taking a 5% commission, the travel web site's revenue is $500. Big difference between $10,000 and $500, but only one of them accurately reflects the revenue grossed by the travel web site. Same story with notional exposure vs real exposure.

Anonymous said...

Mini, as someone mentioned above, it would be great to have a topic on "Breaking Up Microsoft", what people think, pros and cons, etc.

My personal opinion has been, since the DOJ case, that it's been needed, but would have to be done in a voluntary fashion, rather than broken up by government.

Anonymous said...

TechReady should have been canned. Numbers are way down, and sessions are so lightly attended I feel embarrassed for the presenters.

Anonymous said...

"If, say, Boeing had decided to make the Zune instead of Microsoft, we'd all be laughing too. It makes about as much sense"

The trolls are out in full force.

Anonymous said...

@4:48...

Thats a great explanation of that demonstrates a solid understanding of derivatives, but I wonder if you may be missing a piece of this puzzle?

Ideally, the CDS relationships should cancel out, but reality, they do not. The reason for this is that most institutions *over leveraged* banking on the foundation asset being extremely long term.

It has been often said that the value of the derivatives market was larger than the sum total of all real capital in circulation.

What this means is that, while the 180T figure may be exaggerated, the real figure may certainly be in excess of *all real capital in circulation* which has the potential to cause complete insolvency of multiple banks and counterparties.

The effect that would have on the "real" economy is, quite honestly, unknown and unprecedented.

Anonymous said...

The Up or Out policy should be canned. It only encourages bad behavior not condusive to a healthy working environment. The standdard should be set HIGH at interview time, and then, let people be free to choose to aspire to move up the corp ladder, or be very good and productive at doing his stuff at a certain level.

Anonymous said...


Well i got the door today.

random.

STB just after the townhall.


Definitely calling FUD on this one. If true, then the situation is even more messed up than I can imagine. Anyone can be laid at anytime, with no reason? What kind of BS is that? I mean, I understand the whole "at will" thing, but this simply can't be true.

Anonymous said...

I just published Microsoft Laid-off workers speak up! -- Layoff Satisfaction Survey". There are some interesting facts and feedback from fellow Microsoft folks you might find interesting.

Anonymous said...

------On the topic of voluntary retirement, here is a precedent by Intel - the offered 4 months of pay and 1.25 week of pay for every year worked. Wonder if Ms would do something similar:

+1. This is good idea. I am ready to help ease the head count burden for something like this.


Actually +2. I too will gladly accept it and help MS with it's operating costs woes.

Anonymous said...

On the topic of voluntary retirement, here is a precedent by Intel - the offered 4 months of pay and 1.25 week of pay for every year worked. Wonder if Ms would do something similar:

+1. This is good idea. I am ready to help ease the head count burden for something like this.


Actually +2. I too will gladly accept it and help MS with it's operating costs woes.

OK, +3!

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