Shared Sacrifice and Microsoft Free Radicals
How have you been doing? Me, I've been doing some kind of wonderful.
Since I pressed the pause button (a button I'm going to be enjoying quite often) a lot has happened yet not happened. Sort of like those layoffs. Just like you and your fellow Microsofties, I talked to a lot of people who where either affected by the 1,400 cut or who had a friend affected. From just my perspective, everyone I know or know-of through someone in Redmond was... rehired.
When's a layoff not a layoff?
I mean, even the folks I muttered, "Whew, thank goodness they took their badge and finally got rid of 'em" got rehired. Sheesh. We can't even do layoffs right. For at least the slice of people I know of, this was more a rebalancing than a layoff. Sorry, Ms. Bick, I guess I don't know the folks you wrote about.
Also during this time, both Toyota and HP made interesting moves to deal with the impact of the crisis on their business. I pay attention to Toyota thanks to writings like those of Mary Poppendieck's that look at Toyota's approach to empowering its engineering employees to make direct front-line team decisions, sort of like the feature teams various product groups at Microsoft have. And of course, HP is a big Microsoft partner. Both went down the path of avoiding layoffs. Both cut salaries vs. having layoffs, a "shared sacrifice" in Toyota's word (more on Toyota: Japan's management approaches offer lessons for U.S. corporations).
Mark Hurd's memo about the HP salary cuts should have been the memo that Ballmer wrote. Why? Because in it Mr. Hurd reviewed how they already had done due diligence to become a lean and mean company, and that further cut-backs didn't make sense. Also - call it a token gesture if you will - he and the executives took the biggest salary cut. Yet he re-emphasized that HP will pay for performance. None of our executives had said anything about taking a cut back, but rather just re-iterating that their SPSA payout will be less because the company's bottom line is suffering just like everyone else in this crisis. But zero details other than "significantly less."
Winking while we stuff our pockets AIG-style.
So yes, HP will have restructuring, but they don't have 3,600 additional cuts hanging over people's heads.
Do you think that the concept of shared sacrifice would work at Microsoft? If it still felt like a company driven by the employees, probably so. That's my perspective. I think if we still felt like the drive and ambition of the front-line employees shaped the company and defined it, then helping one another would make sense. But the huge growth shattered that sense of employee ownership, abetted by the abysmal Microsoft stock performance we've had since, yes, Mr. Ballmer became CEO. With that all these layers and organizational obstacles spread about and it went from a different, special place for crazy-happy geeks to a jay-oh-bee.
Mr. Mundie recently reflected on a number of topics. One idea was the desire for Microsofties to move around in the company more effectively. I love it. If someone, like, oh, our Senior VP of HR, was to take a moment and muse, "Now's a great time to go back to basics and focus on what it is to be a Microsoftie" one of the keystones should be job movement through the company as part of following your passion and ambition. Maybe it was easier to take risks, be bold, and honestly do what the hell you really wanted to back in the mythic days of FYIFV. And gee, guess what? What do you get when you have people doing what they want to do? Great results.
Obviously we've got about zero job movement right now, so that has to be fixed first. Microsoft gorged itself at the buffet bar of mediocre hires. And now we're bursting at the seams and deadlocked. We are stagnant right when we have two major product releases coming in for landing - Windows and Office - and you'd like those people to be ready to move around Microsoft and cross-pollinate good engineering. Especially those responsible for the obvious success of Win7. Maybe some movement will happen within Windows and Office themselves, but not across the company and probably not into their groups from other parts of the company. Hell, you have people in Windows worried that the Senior Leadership Team is waiting for them to get to a safe RTM harbor so that the 3,600 quota can start getting taken care of. Do you expect people to look around - to take risks - in that environment?
FMIWIWFV!
Zero attrition. Stagnation. Organizational constipation. Nothing good comes out of that but corporate sepsis. Given that our leadership team has had their cage rattled by the global crisis, has examined all sorts of horrible past economic situations, and has locked down on the hiring and gotten on-board with some odd variant of firing, you'd expect they are playing out the forward-looking implications for the product groups and other Microsoft divisions, right?
I'd hope so. But it's not based in any sort confidence based on past results. And it's certainly not based on our leadership engaging with us as we work and live through this crisis. Things are certainly uncomfortably quiet. It's the worst side of "best of times, worst of times" but one hell of an opportunity for re-birth and re-engagement and truly building a stronger Microsoft. A few challenges and opportunities I'm thinking of ahead of Microsoft:
EU: you say "ee-you", I say, "ewwww!" As long as the Microsoft ATM continues shooting out cash fines the EU is going to keep mashing our buttons. Kudos to the folks in Office for demonstrating foresight to jump on documenting their file formats and protocols, even enduring the inevitable attrition such onerous work forced upon the team and the delays to O14 it caused. I'd say, at the end of the day, this saved a large chunk of a billion dollars in fines that the EU would have gone after. You talk about people who deserve to be in The Circle of Excellence? If they head off another EU money-hunt, it's the O14 crew. And good job, Win7, in making IE8 removable. Now, what's the next EU target?
Review Reset: as organizations look to clear out the recent mediocre hires to make room to hire excellent people suddenly really interested in working at Microsoft, middle management is discovering that the review tools have really screwed them over. Told you. To keep everything clear and accounted for, I spend four times the amount of energy dealing with the new review tools through the entire year to get the same results before with the Word form. The current system is wasteful. If it can't be modified to spit out some fixed commitments based on your level, it should be replaced with the old simple Word form.
Free Radical Career: I'm pondering ideas about making employees more mobile within Microsoft. The one I've come up recently is to let anyone who has reached a certain career achievement (Exceeded/20, or just in the top 20%) to be free to move to another part of the company and to have their headcount and associated budget go with them. E.g., the destination team doesn't even have to have open headcount, they just have to be willing to have this new (great) employee come over and join. Okay, they do have to have office space. Sucks for the former team, great for the new team. I know, my first worry there is that you get one crazy charismatic leader and suddenly everyone is working on BoonDoggle '12. But my goal is that if you're great, you can literally write your own ticket to be where you want to be in Microsoft. We need something to break the career stagnation because I know of folks already dorking with their organization is small, petty ways, and remarking, "Well, where are they going to go?"
CRF: Unmoderated comment stream for "Shared Sacrifice and Microsoft Free Radicals"
118 comments:
Welcome back, Mini ...
Do you think that the concept of shared sacrifice would work at Microsoft?
It'll be tough. Goals aren't aligned, and groups and people have been pitted competitively against each other for so long that there are lots of ingrained habits. Plus costs have been squeezed for so long that it's hard to crank it up more.
What's needed is a visionary and inclusive strategy and solid execution plan, one that doesn't just revolve around the perspectives of older long-time employees in Redmond, focused on leadership. People at Microsoft love a battle and a cause. Now's the time to inspire them.
Interesting to see that you are jealous of the HP cuts.
1. Mark's bonus scheme is such that he will take a big bonus even if different bits of the company don't make money.
2. EDS US employees got an extra cut.
3. It's a permanent cut -and will reduce any redundancy pay by 10%, if and when there are job cuts.
Here in the EU, the pay cut is optional, and management are required not to discriminate people who opt out of participating. I don't know what percentage will take part. If I do it, it would be from sympathy with my US colleagues, who didn't get a choice in the matter. But there are other actions -selling off most of our site, cutting our cubicle space in half- that already hurt quite a lot, and unless management are seen to be suffering, it is hard to feel motivated.
The important thing about a pay cut is that you leave the teams in place, which random job cuts don't do. They kill productivity unless you shut down entire product lines/sites.
Please don't use HP as any kind of example of how to run a technology business. There is no shared sacrifice happening in HP. Senior management took token cuts to base salary, which is a small part of their total comp. On the other hand, the 5% cut imposed on the rank and file is causing real pain. Most people have been seeing zero or below inflation raises for many years, no stock options, benefit cuts, and a never ending series of layoffs. BTW, HP is the master of the "stealth layoff". Hurd will say that there's no "company wide" layoff plan, at the same time ALL the business units are shedding people. Anybody believe he isn't aware of that? He also talks about total headcount, conveniently obscuring the fact that layoffs in the US and Europe are being offset by hiring in India. HP is also laying off engineers and hiring sales reps. Hurd doesn't think HP can gain a competitive advantage by having great products -- his grand plan is to be a low cost producer that's really good at selling the crap. The awful truth is, this strategy will maximize profits in the short to medium term. Nobody cares about the long term any more.
Good lord I wish I could move around easily. My team was re-orgd in November and is still a moving catastrophe but my 18 months aren't up yet, so I'm stuck, stuck, stuck unless I want to end up on the layoff list for daring to interview internally.
...do you have to be in a role for 18 months before you can move out?
From just my perspective, everyone I know or know-of through someone in Redmond was... rehired.
"Comforting" for this still-trying-to-find-a-new-job non-Redmond E/20 from a group that wasn't gorging at the mediocre hire trough. Redmond screws it up, keeps on with business as usual and sticks it to the rest of us.
The people I know who got laid off are still job hunting
let anyone who has reached a certain career achievement (Exceeded/20, or just in the top 20%) to be free to move
This would only make sense if the review system actually allots people to the right place in the curve, oops, bucket, through their own merits. Everyone knows it is just a popularity context.
Then again, if it was really the top people that got the Exceeded, and they would be allowed to move freely, managers would not give them the Exceeded label because the managers do not want to lose their best talent.
It's a lose lose situation...
The MS layoff wasnt really a layoff directed at the bottom line but more of an opportunity to make some business changes without garnering too much attention. Not many even internally to MS seem to have clued into the significant business strategy change implied with what happened within E&D (arguable the most impacted org)... I am sure it will become clear in the coming year.
Sure, it wasnt any fun to those that didnt find another job but any subjective analysis across your personal and professional network will likely reveal (as it has for me and just about every person i talk to) that upwards of 25-30% if not more of the people that were layed off were rehired within MS and never missed a day of work. Many of the former employees i know or heard about that didnt find work were either too specialized or filled roles that are better to outsource.
Interesting, who d'punk, that you'd be taking off so much time at a moment in our history (company and world) that so many opportunities for leadership exist. The idea behind the free radical is interesting, but it's difficult to say how it would react with human nature. Would it result in better teams or even further the problematic empire building?
The most important comment in your post is the one about now being the time for a real leader to step forward and set the direction for our company. Microsoft is one of a few companies that has the potential to lead the country and world into the next wave of growth. Such downturns are always broken by the adoption of a new technology (TV, Computers, Internet). If Microsoft had a visionary that was willing to take chances on ideas (instead of reacting to already-done-that ideas), we could come out of this as the most important company in the world.
I won't hold my breath.
I wonder about the "mediocre new hires" comment. In my experience at Microsoft, "they" find it easy to blame the employees...the new hires....the people who don't operate within the "Microsoft Way" philosophy. I like to believe that people will rise to a level of greatness, if they are inspired. We don't really have any inspiring leadership within Microsoft and I think it is disingenuous to blame the employees for any of this stuff.
Our performance review-committments system sucks, by the way. Too competitive, too subjective, and not subject to challenge or review...not that it is atypical for any large corporation, but stop touting Microsoft as such a different, wonderful, unique large company.
Just my two cents...
Good move Whoda. It is, after all just a blog to which you owe nothing whatsoever except your good will.
Shared sacrifice? Maybe not unless people understand that everything has been devalued without the actual announcement by Washington (DC) that a forced devaluation policy is in effect. In other words, everybody wants it all, now, as much as possible without sacrifice, and since nobody really got laid off, well, what does it matter? Along with real estate, stocks, bonds and inflation, the only thing left to devalue more than 50% are salaries. That only comes when each company faces bankruptcy. Microsoft is not even close to that.
Meanwhile, Microsoft engineering design is still shifting to China, Senators and Congressmen are still wondering if Microsoft actually attempted age discrimination in the form of layoffs (now reversed for fear of more congressional action), and nothing has changed except the date. And Windows 7 will allow the Monop-o-ride to continue a while longer
Meanwhile, Microsoft continues to hire in Yahoo expats: Dayne Sampson, Qi Lu, Sean Suchter, Larry Heck, and Scott Moore. ref: http://news.cnet.com/8301-10805_3-10207374-75.html?part=rss&subj=news&tag=2547-1_3-0-5
And I noticed a heavily Yahoo friendly IE 8 adaptation version being pushed by Yahoo to Yahoo customers. Download Now they tell us.
Mini, nobody I know in the 1400 group has been hired back by the company... and I know about a dozen people who were in that number.
It's a great notion in the Free Radical Career section to create a "movement reward", but I think that it has a major flaw. What's the incentive for a manager to give high marks to a team star if that also unshackles them from the minimum term of servitude?
Now granted *I* as a manager would always do the right thing :-) but I'm not as convinced that so many other managerial types have this company over me integrity. Instead, I see a proliferation of the most loyal to the boss (aka the "Mouth of Sauron") getting the 20's, while the guys throwing the team on their shoulders and carrying them to the finish line getting the old exceeded/70% along with the Maxwell Smart "missed it by that much" encouragement to try just a little harder.
I get that the idea is to be the great manager that gives fair marks AND that people don't want to leave. The problem is, this altruistic scenario is too uncommon, while the "what's best for my career" managers are too many.
Hi Mini,
Salient points and obviously on point re: review monstrosity and the remaining 3600 causing a complete and utter stoppage of our corporate pipes.
Re: shared sacrifice? For me it'd be a tentative and skeptical maybe. I'd want complete transparency into all the nooks and crannies of our execs pay/benifits mechanism. Frankly I don't trust them to not play Where's Waldo with their treasure. 'Look we cut our pay 20%, we're just asking you to take 8%'. History tells me that 6 months later someone would dig out some deeply hidden filings that show mine was a perpetual reduction while theirs was temporary, they get some fat bonuses based off me taking it, they get accerlated SPSA grants in cash based on some twisted formula that has nothing to do with business reality of the time and they'd get commuter helicoptors after my bus service gets cut.
Re: Free Radical. Love, LOVE the idea. Devils in the details though. My trust level is such that I would assume management would leave so many fuzzy rules open to varied interpetation that I'd have to navigate those waters very very carefully. Hard to imagine the current regime could put something in place that would be safer to bolt internal than external using a tool like this.
Way back when I joined MS it felt like my value was determined by how fast I ran a footrace. Now I feel like I'm in a figure skating competition & spend 1/3rd of my time making sure my makeup is not smeared, I'm smiling at the judges, being attractively perky and applying more flair and sequins on my costume. It's pretty damn easy to succeed, but demoralizing.
I was one of the 1,400. I applied for internal jobs (because I still had my badge) and received no response from the recruiter. I applied for a job outside of MSFT that a friend referred me to, I heard back almost immediately, and I now work there. Thank God. I'm glad to not be working at the pressure cooker named Microsoft. I needed a break anyways.
Google has something like the "free radical" plan already in place. Every 18 months to 2 years (depending on project schedules) anyone with reasonably good reviews can apply to any other team in the company. The new team does need to have headcount, but the GOOG headcount rules are pretty flexible so that's rarely a problem. (As far as I am aware headcount is allocated to divisions, like "mobile" or "maps" rather than to individual teams.)
Also, people don't just jump to a random team - instead they use their 20% time (it actually exists if you want it to, even though many people don't bother with it) to try out a new team part time and see if it's a good fit.
It's sort of sad (from the GOOG side) to watch what Microsoft is becoming. You've got tons of talented engineers and some great product lines, but pretty much every division is falling on its face because MSFT is trying to compete in every single market. Apple doesn't have a search engine and Google doesn't make hardware, but Microsoft needs Live, Zune, Xbox, and 1000 other ventures that divert attention and resources from the core businesses of Windows and Office.
Look at Mobile. Google managed to get Android - a decent mobile OS - shipping in about 2 years. Apple's iPhone OS is the envy of the industry. And MSFT - with a lead time of a DECADE, thousands of enterprise clients and (theoretically) world class expertise in writing operating systems, is still peddling a mobile OS that competes with PalmOS. When even Palm is lapping you on operating systems - your core business!!! - something is very wrong.
Someone needs to sit down with Steve Ballmer and teach him a thing or two about running a business, instead of running a business into the ground.
"Mark Hurd's memo about the HP salary cuts should have been the memo that Ballmer wrote. Why? Because in it Mr. Hurd reviewed how they already had done due diligence to become a lean and mean company, and that further cut-backs didn't make sense."
Hurd showed leadership. A shared sacrifice would have been better than the token MS layoff. But HP actually did the due diligence to become a lean and mean company in advance. So further cutbacks really didn't make sense for them. Even a cursory review of MS shows that isn't the case.
Good to see you back posting. You were missed.
I am working for MS in Asia. I heard that the next layoffs will be in remote group because its very easy now to hire people in US. has anybody heard this yet?
I have direct, recent experience interviewing over 30 of the 1,400 in the US, and can tell you that (1) they are still unemployed after their 60-day period ran out, and (2) they are not the bottom of the barrel. In fact, there were several e/20's in the group, and all of them were very bright, motivated, and what I would consider to be excellent 'softies. Needless to say, I have had several WTF moments lately as I look around at some of the "talent" that was not part of the initial round and think about how much real talent we wasted by this miserable, haphazard process of lay offs. Sad.
Shared Sacrifice... Interesting comment. To a certain extent we have shared sacrifice today - sacrificing the future and chaining ourselves to a leaky ship do to lack of leadership. But I digress...
For shared sacrifice to work in the description you provided would require the following:
1. A true company strategy - technology strategy, market strategy and sales strategy - that is connected together
2. A commitment system that actually works. The "cascade" model is a bunch of BS and doesn't work.
3. Commitment attainment tied to performance. Yes, the current review model is extremely subjective and poorly implemented which is the real reason we haven't laid anyone off for performance (e.g. the chronic 10%-ers) because we're afraid we'd get sued and lose. And that is a valid fear.
4. Executive compensation that is tied truly to their performance as well as the company's. Transperancy and not the wink wink nod nod give them the big payout model we have today. It is ridiculous. I work with several partners who are a giant waste of time and money. One is even on the HR watch list for being inappropriate to employees - so why is this person still being paid the big bucks again?!?!
5. This is a hard one to say - but we need a new CEO. SteveB, love you man, but your time has come and gone. We need a CEO who can manage Wall Street, actually work with customers and not scare the daylights out of employees.
So "could" shared sacrifice work in theory yes. In practicality not a chance at the moment.
A question for the 1400: Did anyone else find their severance payment today to come up short? Mine was, and without an "itemization," it's impossible to determine whether I miscalculated or the crack accounting staff did.
Additionally, does anyone know whether such an "itemization" might be forthcoming at some point in the future, or do we just get to take accounting's word for it?
I have been reading this blog since last 3 years, and time and again the topic of firing Steve Ballmer keeps coming up.
Here is what I suggest. Lets do a common poll on the shoulders of Mini's blog and post the results in InsideMS blog. May be "they" will get some clue.
Given the fact that many news agencies, blogs and sites refer to Mini for MSFT internal news, who knows this wish of replacing Ballmer with a true leader comes true.
Should Steve Ballmer be fired?
My vote: Yes
The severance payout is smaller because they've decided to tax it as a 'bonus' (i.e. you get 66%), not as regular wages. At least, this is what HR told me.
Re: 18 months - you have to be in your job role for 18 months before you can interview for another internal position without having to inform your manager. Less than 18 months, you have to get their permission.
I say do away with that rule entirely.
If this rule was rolled back and I was a hiring manager and asked how long someone had been in role and the answer was less than 18 months, I'd ask some harder questions about why someone wanted to move around.
I've seen it go both ways with people who got stuck in bad teams or under a bad manager, or people who never should have been hired in the first place struggle and think another job will save them.
In my case a re-org put me in a dysfunctional org and saddled me with a manager who communicates via PowerPoint.
I'm almost ready to interview externally and I certainly don't have to alert my manager. Then it'll be up to that person to figure out how to justify my headcount in the current situation.
1. Out of the 11 layoffs I've heard of, none were rehired within Microsoft.
2. I don't think our new hires are mediocre.
That is all.
People continue to confuse layoffs with performance management... they are almost always unrelated (in all companies, not just MS) which is why we tend to have the perception that mid to high performers were affected while underperformers were left untouched. Obviously you keep as many high performers as you can but that is a secondary consideration because layoffs are business driven. Once a company decides to trim a business, that means people get laid off which is pretty much what happened here although not as deeply as we should have. Microsoft needs to put more focus on managing out low performers continually as part of sound performance management but the two activities are not really as related as people think.
Should Steve Ballmer be fired?
Here's another YES vote.
mini, i am completely supportive of your basic free radical idea -- simplify the process to let achievers move around. but the obvious error in your logic is moving headcount dollars. the old team still needs a backfill. high achiever ready to move on does not equal old team is lame. it might just be time to move. i know you weren't necessarily implying this, but thought i'd clarify. if a new team has a headcount, we should streamline the process for high achievers. i say we lower the bar for e/20 movement. they've met that standard, and so a hiring manager can throw together a simple loop (2 or 3 people, if they'd like) and make a decision. it amazes me the hoops we put people through on the inside, right alongside anyone on the outside. if a person is a known quantity, has consistently delivered, and has the skills for the new role, why not lower the bar?
and then don't get me started on job leveling. if i am hiring a 62 and someone meets the experience bar but happens to be a 59 (because experience prior to joining MS *DOESN'T COUNT*), it should not be such a headache to grab that person. people cling to the hierarchy around here, and its another example of where we make it difficult for ourselves to just make the right choices for our business, IMO
Google has something like the "free radical" plan already in place. Every 18 months to 2 years (depending on project schedules) anyone with reasonably good reviews can apply to any other team in the company. The new team does need to have headcount..
So, to recap:
Every 18 to 24 months at Google a decent performer can apply to another group within Google, so long as that group has headcount.
This is actually more restrictive than what Microsoft has in place today, and much more restrictive than what WhoDa is suggesting.
"Way back when I joined MS it felt like my value was determined by how fast I ran a footrace. Now I feel like I'm in a figure skating competition & spend 1/3rd of my time making sure my makeup is not smeared, I'm smiling at the judges, being attractively perky and applying more flair and sequins on my costume. It's pretty damn easy to succeed, but demoralizing."
YES! I have seen this as the way to promotion. We have lost our way, and the current folks in charge will do nothing to change that, they like it.
Mediocre? No way! All the people I have met at MS have good talent. They may be diverse set of talents, but not mediocre. I have never seen a MS employee who does not have it in him or her to learn something new and excel at it.
The thing that makes the employee mediocre is not the new hiring, but rather the old philosophy. I have seen exceptional talent that have been demotivated to such an extent (thanks to our review systems and butt-licking of manager) that they have lost the will to "think differently". All they need to do to get the e/20 is to butt-lick the manager. Say Yes when the manager says Yes, say No when the manager says No. Don't dare to do any different.
If we want to build a better Microsoft, we must first fix _how_ we decide who falls in the e/20 bucket, and how an employee goes one level up the ladder. This year, I was denies a level higher because I had one "just last year". In my managers words, "You had a promotion last year, so it was difficult to justify one this year, although you meet (and sometimes exceed) all the CSP competencies for the next level". This is the thinking that gets us in a rat hole, and this is the kind of thing that de-motivates employees. I know I will not get a promotion for another year because it is "too early", so if the times were good and it was easy to find a job, I would have not blinked twice before applying to a host of companies that respect employees, treat them well, recognize their good work, and have a fair policy in place to evaluate their contributions.
None of the 1400 I know got rehired (though I only know a few) - that includes my wife who was at msft for over 8 yrs and always rcvd an exceed rating (except for the first review period after a promotion, and she had several). She even won lots of awards (star employee, staffing excellence etc - I lost track of them all).
She was in HR and was not able to even get a SINGLE interview for internal during her period of internal search. She was lined up for some but either the position dissappeared or as one recruiter put it something like: " we were surprised by getting much higher level people with more experience than you applying for the job so we've decided to cancel your interview." even though the job was at same level she was - so people are stepping down levels for jobs.
Despite her VP telling her that msft would "do whatever it takes to find her a new job at msft to keep her" not even one interview. She is absolutely crushed and as her husband I have no idea what to tell her to lift her spirits.
I am happy that some people got to stay on - I just hope they were the bright productive ones - not the political game players that have poisoned some groups.
You know why Windows Mobile sucks so bad? Because Pieter Knook and Todd Warren thought that RIMM was the one to beat, and they didn't care at all about the End Users. And when Steve Ballmer called Pieter on it, Pieter looked right at him and said "no, you're wrong". It took TWO YEARS for Ballmer to realize Pieter was wrong and fired him, which set off a chain of events leading to Todd leaving too (and some other idiots). The new WM management team "gets it", but it's going to take some time to dig out of the very deep hole. Ballmer should have fired Pieter two years earlier... if he did, MS would be in a great place.
I also noticed my payout was much smaller than I estimated...by thousands. I am surprised given less is taken out for Federal withholden given the 2009 Stimulus bill. So it makes sense why given it was taxed as a bonus. That just means I'll get a fatter refund from Uncle Sam next year.
Should Steve Balmer be sacked?
My vote: Yes!! Now!
"Ballmer should have fired Pieter two years earlier... if he did, MS would be in a great place.:
Yeah, and if Ballmer had only fired Allchin two years earlier, gotten focused on search two years earlier, refreshed IE two years earlier, put Zune out two years earlier, anticipated netbooks or this recession two years earlier, blah, blah, blah. I agree that Knook failed, but Ballmer was the one who hired him into that position. I'm getting tired of every fubar and missed opportunity being someone else's fault alone, never the person ultimately in charge.
If Steve were to decide to, say, "spend more time with his family", there would be hope for the stock price.
Otherwise, see you in the low teens.
This one's a no brainer: Yes.
I also noticed my payout was much smaller than I estimated...by thousands.
The same case applies here -- by thousands. Mine was direct-deposited, so I received no stub. Is there a way to access that? I'd like to try to make sense of the discrepancy.
>Meanwhile, Microsoft engineering design is still shifting to China,
If they can fail to build products that users want for half the cost of us in Redmond failing to build products that users want, I really don't see a problem with it.
I only wish I were joking.
A number of good people from Aces Studio (the Flight Simulator people) have left the company. Watching their farewell emails come in was wrenching.
Where are J and Ray when we need them? Where oh where have our leaders gone?
Having said all that, I am unemployed, after March 23. My spouse was already without a job. My baby needs a lot of attention, and I am unable to interview for jobs at this time.
I did one interview loop during my 60 days after receiving my lay off notice. My interview loop consisted of some condescending people who seemed to indicate that I was inferior to them because I was laid off. One of my interviewers asked me questions focused on my lay off - why I was laid off, the work that may have led to my lay off, etc. I knew I did not want that job half way through that interview.
I applied to 7 positions during my 60 days, 6 hiring managers responded, 5 of them discussed bringing me in for interview loops, and only one of them did. The others ran out of time. I do not know why.
In the last one week, several people who have known me at Microsoft reached out to me, wondering why my name does not show up in the GAL. Every lunch and dinner I have had since the 23rd has been with contacts from Microsoft who wanted to speak with me. I have totally enjoyed working at Microsoft. I met some wonderful people there. But in the last few months I have been treated worse than I could ever imagine being treated at Microsoft.
I am glad that I was chosen to be laid off. I became so blind in my passion for my job that I did not realize that the corporation is not a human being. I was wrong to expect to be treated well. I am glad I do not need to kiss ass these days to avoid being chosen in the next round of lay offs.
Yes, I was one of you guys, wanting to see the lazy ones laid off, wanting the company to return to the days I had only heard existed before 2000.
Then, I was chosen among the 1400. It came after 7 years of top performance, not only in the annual drama with stack rankings, but also in actual revenue and profitability increases as a direct and measurable result of my actions. I accomplished those results without hurting a single other person at the company or outside.
Mini, you seem like a one-person focus group. Who are the 1400 people you believe were rehired at Microsoft? I have not met a single one of them, and I belong to the social groups of the Microsoft alumni!
I wish you all the very best at Microsoft.
"If Steve were to decide to, say, "spend more time with his family", there would be hope for the stock price."
No more obvious than today. Most big technology stocks are up 5-7%. MS is up less than 2.
Mini, I think your comments about the number of people who were re-hired after the layoffs are misleading, as has been shown from all of the responses here...
Would you be willing to edit your original post to reflect the feedback so it's a bit more balanced?
I know a 6 who got laid off - none found another job internal.
They are low performers - this layoff has nothing to do with performance. Whole groups got axed.
I agree with having mediocre new hires. The hiring bar has been lower in the last 2-3 years.
All of this "radical" talk makes me wonder why the heck true "superstars" would stay at Microsoft at all. You know, there are no time limits on how often you can move from company to company, and you don't have to ask anyone's permission. :-)
And you're likely to get a nice salary bump (and/or a signing bonus) every time you move, assuming you're as good as your MS numbers seem to imply.
Seriously, what's up with MS employees' fear of the open spaces?
If I may, I would like to enjoy a brief moment of schadenfreude at Sun Microsystem's expense.
I.B.M. Reportedly Will Buy Rival Sun for $7 Billion
Serves you right, McNealy. Should've focused on building good products instead of jeering at Microsoft.
Should Steve Balmer be sacked?
My vote: No!
He is very realistic, and knows that profit margin and market cap of Microsoft had been at unsustainable level for a decade now. We need a leader who could let microsoft's profit margin and MSFT stock price come to reasonable level gracefully.
Anybody else would have taken too much risk to maintain unrealistic expectation, and in doing so might have taken unreasonable risks. There might not have been an intact Microsoft if Steve was not the CEO.
We should never compare what was the past. In past we might have won a lottery. We should always compare what could have been a realistic present and what we have. IMHO, we have much better present and even better future than what would have been possible, if a leader like Steve was not helms.
Mini is speaking the truth. My group got canned but nearly all of us found new positions.
In response to: He is very realistic, and knows that profit margin and market cap of Microsoft had been at unsustainable level for a decade now. We need a leader who could let microsoft's profit margin and MSFT stock price come to reasonable level gracefully.
I am bowled over by this blind loyalty. On the financial side, we've lost support of many stockholders and botched the handling of our last earnings release.
Ballmer's lack of leadership goes even deeper, though, by not aligning us for the future. We have missed so many opportunities under Ballmer's direction, and we've enabled our perception to sink lower and lower.
A recent example is the negativity on Twitter and other places about Microsoft at the Web 2.0 conference. People are continuing to see us as out of touch with the Web and not innovative, and I'm wondering when we're going to turn this battleship around.
http://tweetgrid.com/search?q=microsoft+%23w2e+
http://tweetgrid.com/search?q=msft+%23w2e+
"He is very realistic, and knows that profit margin and market cap of Microsoft had been at unsustainable level for a decade now. We need a leader who could let microsoft's profit margin and MSFT stock price come to reasonable level gracefully."
A decade ago the market darlings were the four horsemen: CSCO, ORCL, SUNW, EMC. And while all stocks were expensive on a relative basis then, MS was cheaper than those. In the ten years subsequent, all but EMC have performed better. If you add their stake in VMware they probably have too, at least on an all-in basis. Then you have the PE, which is now lower than the S&P average and has been at many times throughout this decade. Hard to argue that MS shouldn't command a premium to the S&P, but under Ballmer it doesn't and hasn't.
If your criterion for CEO is someone who can engineer lower margins because of failed diversification investments and a lower market cap, no argument Steve is your candidate. But why would any sane person want that?
You know, there are no time limits on how often you can move from company to company, and you don't have to ask anyone's permission. :-)
And you're likely to get a nice salary bump (and/or a signing bonus) every time you move, assuming you're as good as your MS numbers seem to imply.
If you're saying that people who are unhappy shouldn't fear going elsewhere, I agree. If you're talking about rapidly inflating one's income by becoming a serial job switcher, on the other hand, I have to disagree with you, especially now.
I used to know several people who swore by this strategy during the dot-com bubble. And it served them pretty well, for as long as the boom lasted. Once it ended and the layoff ax began to swing, they discovered the down side of doing this: Your employer tends to notice when a) you're really expensive, b) you haven't been around long enough to do anything important for them, and c) based on your past behavior, you're going to leave in a few months anyway. You're the obvious person for them to get rid of, before they even start considering people they might actually miss.
And in a now-much-less-friendly job market, your odds of flitting painlessly on to your next, even more lucrative short-term gig are low, to say the least. Prospective hirers do look at your employment history. When I read a resume from someone who's made a practice of this -- and it's usually pretty obvious -- it goes in the trash. Why would I want to waste my limited budget on someone who will demand a high salary, has few accomplishments (almost by definition), and will leave me searching for his or her replacement in the near future anyway? Not when there are others readily available who'll be far more likely to justify the investment.
A judicious move here and there is a good thing for your career, obviously, but trying to build an ongoing lifestyle around it will make you job-market poison in the long run. Extrapolating from your experiences during an economic bubble and assuming that they equal useful career advice in general is not such a great idea.
"People are continuing to see us as out of touch with the Web and not innovative, and I'm wondering when we're going to turn this battleship around."
Worse, they're starting to associate the Microsoft brand with those two undesirable qualities. And as tough as it will be to get Ballmer out, rebuilding a damaged brand will be even harder.
People are continuing to see us as out of touch with the Web and not innovative
Why is there an expectation that in order for Microsoft to be a great company it must invent every successful technology product out there? I'm not saying it should be complacent, but it's Ok not to be the source of every cool thing in the world.
Microsoft is a victim of its own long term success and we're all taking the bait internally by turning every damn product into a life-or-death game. This in turn puts pressure to chase some established bar (whether it's feature or design or revenue). And of course you fall short because you can't build it overnight and then you look bad. But you look bad compared to a goal you artificially set for yourself because we're proud and we take the market bait of being the best and dominating _everything_. Just because you have the most envied cash cow in business history doesn't mean you have a Midas hand. And if we want to explore an established market let’s pursue it with a spin-off so we’re hidden from Wall Street and customer expectations. It’s ok for a v1 to suck.
Take Zune for example. In itself it’s a cool product yet it was pitted against the market share and perception of iPod compared to which it sucks (perhaps no matter how hard you try to position it differently, the market still pits them against each other). But it's not an inherent failure of Zune, rather it's the nature of a business that tries to be too much in the face of a good competitor. A niche strategy would help us save face here, keep a good product and make customers happy.
Can't we learn from our own story when we're on the other side of the coin? Look at the OS or browser market. Windows or IE in their markets don't even have the customer sat that iPod or Google enjoy in their markets, yet there's no significant change even if we fucked up for a release. I’m not saying it’s ok to fuck up, I’m saying well established market positions are hard to beat and if you attack in a straight line across an open field you’ll probably be destroyed.
Yes, I know, we're fucking smart and great and can beat everyone at everything. But we have to stop taking the pride bait and realize that computing is changing, there are many plays and more than one platform is Ok. We're chasing too many balls and making fools of ourselves in the process. We want cool and innovative, but at the beginning that’s small and no revenue. We want revenue and market share and don’t have patience to it for it to grow. It not just us though. The customers and Wall St are pushing us in this mindset too.
Let’s be mature and not be annoyed that others are winning too. The pie _is_ big enough and potential is growing with every innovation.
we've lost support of many stockholders
Many is still better than all. Of course the share holders who are living in the world that we could maintain our unrealsitic high margins for ever, we better should lose them. Pick one company which has this high profit margins at such a high scale?
Remember we have a competition now, that is called EU.
If you own any Microsoft's share, I recommend you to sell it. At $60B revenue, perpetually maintaining a market cap of more than $100 B is unrealistic. You could if you could perpetually maintain the growth rate of 20%+ and also maintain the profit margins. That goes for other tech companies. Look at what happened to banking industry. A dollar is a dollar, I used to believe that banking industry deserved higher multiple, but it did not. You would be wrong, if you beleive tech industry deserve higher multiples. It does not perpetually. In the short run, may be.
Do not worry, the same thing will happen to Google and Apple. Just like MSFT in 1998 had priced in the cashflow of next 2 decades (assuming no government intervention), Google and Apple shareholders have done the same. The bad thing happened is that a new negative appeared, which was not priced in 1998, is EU. Having a continental as an adversary mean, that MSFT should be coming down to reasonable profit margins, and virtually no growth rate. Contrary to this, under Steve Ballmer's leadership our growth rate has been fantastic.
We have missed so many opportunities under Ballmer's direction, and we've enabled our perception to sink lower and lower.
A recent example is the negativity on Twitter and other places about Microsoft at the Web 2.0 conference.
Are you crazy or what? Which web2.0 company is making reasonable profit? On the internet, essentially search is making reasonable profit.
Regarding missed opportunities. For each successful startup, there are 100 which go out of business, usually with negative debt. Sure Microsoft could have caught one of the bigger bets, but that would have come at an expense of 99 failures. Guess what? A start up could afford this because they go bankrupt. But a big company, these 99 failures are fully paid expense.
Big bets have reasonable chance of pulling down a company rather than pulling up. Guess what, if we had succeeded in buying Yahoo? We may be cashflow negative for Aquantive. Even FAST had turned out to have accounting issues.
Come out of your dream world. We need a CEO which can bring share holder expectation gracefully at reasonable level. We had won a lottery in desktop era. If I win a million dollar lottery once, and you employ me at $900K per year, believing that I will win a million dollar lottery every year, you would be the biggest fool.
MSFT shareholders in 1998 were fool. Unfortunately not only Microsoft is not expected to win a lottery, but it got a big burden of alimony support. Price that in the share, and you will realize that if we have MSFT anything above $10 today, is not by accident but by our talent, hardwork, and great leadership.
Any ordinary CEO in the hopes of catching big bets would have brought down MSFT. Steve Ballmer almost did too last year. He got lucky. I hope he does not get misconception that he can get lucky everytime. That means, he should sit quitly and not jump in the Tweeter circus.
A great leader should have the ability to bear the criticism. Let the entire world say, whatever they want about Tweeter and Microsoft, if Steve is a great leader he will not offer a dollar more for tweeter than what he believes it is. If he belives Tweeter is only $10 M, even if somebody valued it $250, he should not offer Tweeter $11.
This is the same kind of discipline, which actually helped him in Yahoo. Any other CEO would have thought, what's few dollars, and we may end up having Yahoo at $37. It is very hard for me to see another more able leader than SteveB to run a value company. It is very hard, because everybody keeps expecting start-up like growth, without realizing that start-up like growth comes with start-up like risks. Everybody keeps expecting a value company to catch all kinds of trends, but forget that a big company's momentum is not velocity (growth) but mass (existing profit).
I do not think anybody could doubt the great performance SteveB has on the side of mass multiplier. Velocity multiplier is unreasonable.
"Mini is speaking the truth. My group got canned but nearly all of us found new positions."
You're from a different group than mine!
Google has something like the "free radical" plan already in place. Every 18 months to 2 years (depending on project schedules) anyone with reasonably good reviews can apply to any other team in the company.
The way it works at Apple is that anyone's free to apply for any opening as long as you've let your current manager know that you're looking. Your manager can delay your transfer temporarily, but only temporarily, and it's considered rather poor form to do so; if a team can't stand the loss of one particular individual, then management hasn't done their job.
-jcr
IMHO, we have much better present and even better future than what would have been possible, if a leader like Steve was not helms..
So, you'd just give him a pass for the Longhorn debacle, the billions in shareholder money pissed away on ego trips like Zune and Xbox, and the continuous slow-motion train wreck that is your online services group?
The man is out of his depth. The only reason he hasn't been kicked to the curb is because of his personal relationship with your single largest shareholder.
MS has to come to terms with the fact that reaching market saturation means that you're not a growth company anymore. It's time for dividends. Steady dividends.
-jcr
Well Mark Hurd certainly knows the "leadership speak" ... though actions speak louder:
"Most of Mr. Hurd’s total compensation came from his $23.9 million cash bonus — the largest of anyone in the Equilar survey. Last year, Hewlett-Packard reported a 13 percent uptick in revenue on a 15 percent gain in earnings. Shareholder returns, however, fell 25 percent."
http://www.nytimes.com/2009/04/05/business/05comp.html?_r=1&ref=business
It's easier to point your finger at SteveB in these times coz after all, times are not good. Just to put things in perspective, I am a v- and I was informed today that there will be no commission for Q1 in spite of exceeding the budget.
What I can say for sure is that MS has it's fingers in too many pies and I truly believe that it's best days are over, unless they come up with some game changing next-big-thing (which I sincerely doubt). MS is playing a catch-up in every sphere: X-Box vs PS / Live vs Google / XP vs Linux (NB) / Windows Mobile vs iPhone. MS leadership is missing the obvious, instead of leaders, they have become followers.
Hey you fellas, leave Mr. Ballmer alone and read his MS future vision -
http://bits.blogs.nytimes.com/2009/03/20/steve-ballmer-maps-microsofts-cloud-y-future/
OK, sarcasm off:
According to the monkey boy, the MS future is pretty well mapped, not that complicated, it's nothing like longhorn, more money will be made, that company, Google, is not there yet, and he is quite confident MS story is right . . .
Do I think he should spend more time with his family? YES
The Free Radical idea (and the moral support it receives in comments) tells you a little something about Microsoft culture -- don't think that it's something handed down by executives. People are more than self-serving utility optimizers (mini's naive model of humanity). Also, keep in mind that both Google and Microsoft operate in highly inelastic winner-take-all business lines. Both companies can make tons of management mistakes, keep rolling in the dough, and (tragedy of tragedies) be looked up to for implementing these mistakes.
Mini is speaking the truth. My group got canned but nearly all of us found new positions.
Then I think you and Mini must run in the same circle, and obviously neither of you have connections with the Fargo office. Mini should take a larger sampling before declaring a trend next time. :-\
msft definitely screwed up with the layoff process. I can tell you that as one of the 1400. In spite of lack of internal process, people found jobs internally. It's shocking that msft was so willing to flush that much talent with so little care.
The most striking part of the process is how unprepared the company was to deal with the layoffs. I'm sure in their minds the reason is because they had to keep it a secret. But that reasoning is lame.
On the plus side, those that recognized how talented some of the people were and had open positions got the people at a fire sale price. It's no doubt that those groups will be improved.
There were managers who kept their positions as their groups were cut. That's was amazingly unfair.
Hopefully, msft learned from the process.
So I am hearing that April 15th (ahead of earnings) is the next round of layoff...anyone else hear the same or related?
I try everyday not to be distracted by the whole layoff thing, but now that our groups are being re-orged into EPG, I have a horrible feeling that we are next. Tough working under uncertainty, but hanging in there and showing value.
BTW: IS severence paid as a lump sum total, or is it weekly, monthly, etc? Just tying to stay a step ahead.
Should Steve Balmer be sacked?
My vote: No
Reasons: This is not because he is a great CEO (like the other Steve at Apple). I just don't want to see MSFT truly tail spins at this stage. He is an ok business man, just not a technology leader. However he should move faster on replacing the useless narrow minded CSA and other low performing VIPs (execs, TF, DE, ...).
I can't agree more on the review system. Since I don't know what that tool is trying to delivery, so, It will be tough to determine whether it deliver the stuff it promised to deliver.
On the other hand, I did a simple math in my head,
if the tool already wasted more resources than used to deliver the tool, why not cut the tool? Don't continue to waste our resources to force other to deal with it.
if the tool haven't wasted more resources than used to deliver the tool, why not cut the team whom created it. That team basically having problem wasting that much resources deliver something like that.
So Why did MIcrosoft remove around 900 FTE's since Feb and hire around 3000 Vendors making total count 70K. Does this mean there will be more cuts with the Q3 results?
All of the people I knew who were laid off were not living in Redmond (were in the US field) and none found other work in Microsoft. Several have already found jobs with other companies which is somewhat surprising given the economy.
To the anonymous that said:
Having said all that, I am unemployed, after March 23. My spouse was already without a job. My baby needs a lot of attention, and I am unable to interview for jobs at this time.
I'm very sorry to hear how your and your family are struggling and I'd love to help if I could. While I wasn't one of the booted I don't know if I missed it by much as many of my team weren't as lucky. The whole system is strangely unfair. Getting awards, recognition by upper management, being part of revenue growth don't mean squat. I only know because I've been told I could be next inspite of the above. At the same time I see others do terrible work and cause problems for others only to let their arrogance grow further. Beats me how.
As for turfing big B, go for it. Why not? Perhaps we will get lucky and find Microsoft's new Obama.
Heard on the grapevine Live Labs got disbanded. Could someone confirm/deny?
Hey, Mini,
While I appreciate the thought behind leaving CRF unmoderated, I think you should shut the current conversation down. It is beneath contempt.
There are plenty of places on the web where the trolls and idiots can bait each other -- there doesn't need to be one associated with your name or cause.
Up to you whether this post gets bounced. I am not writing it for public eyes, but as a suggestion to you.
"People are continuing to see us as out of touch with the Web and not innovative"
Why is there an expectation that in order for Microsoft to be a great company it must invent every successful technology product out there? I'm not saying it should be complacent, but it's Ok not to be the source of every cool thing in the world.
This is absolutely a true reflection of one of Microsoft's big problems but it doesn't apply to the internet, which is pretty much where everything happens from here-out.
to the poster who asked:
...IS severence paid as a lump sum total, or is it weekly, monthly, etc?
Severance is paid in a lump sum. Be prepared for a breathtaking tax withholding. It was about 35% for me.
You can also contact HR for details on how the amounts are calculated.
"Last year, Hewlett-Packard reported a 13 percent uptick in revenue on a 15 percent gain in earnings. Shareholder returns, however, fell 25 percent."
His bonus is based on growing the business, which he did. And HP shareholders have done extremely well under Hurd. So I don't think too many are going to be angry that the stock didn't follow fundamentals in one particularly tough market period when the company also made a large acquisition.
"Come out of your dream world. We need a CEO which can bring share holder expectation gracefully at reasonable level."
Who's "we"? Because shareholders don't want or need a CEO who is prepared to settle for your "no growth" scenario with a continued decline in the stock. Or one who has missed as many opportunities as Steve has, while losing billions and billions on the new initiatives he did pursue. And technology companies that stop growing start dying. Which means they need less employees, something MS workers recently got a taste of. Under your scenario, that will only get worse. So who's this "we" who has benefited from Steve's deft touch, aside from MS partners and Apple/Google shareholders?
If your criterion for CEO is someone who can engineer lower margins because of failed diversification investments and a lower market cap, no argument Steve is your candidate. But why would any sane person want that?
If you are a sane person, you would argue against my argument.
Microsoft won a lottery. A past lottery does not increase your chance of winning the next lottery. It does only if you try to use the winning of the past lottery to buy too many new lotteries, but then even if you win, you make a net expected loss.
Microsoft margins and market cap were bound to come down. You have to compare SteveB's performance to not what it was during the lottery winning days, but compare what the situation could have been under another CEO. If you do carefull analysis, Microsoft situation could have been far worse. With $60B revenue, maintaining a market cap of more than $100 B is hard. With only third of the employees than the tech heaviest player (IBM), perpetually creating more value than IBM is hard. Unless of course you believe that Microsoft employees come from a different planet to be 10 times smarter than IBM employees.
In my knowledge, Microsoft is still the most valuable tech company. Even though we know that we have big adversaries. Desktop is maturing, like anything always mature.
SteveB has a fantastic track record, if you understand how hard it is to not jump in the hype. One could invest in all kinds of tickets, but then if you takes that cost into our P&L, our profit would only have been half due to all that additional cost. It is not easy to find other businesses with profit margins as high as Windows. Those events happen once in a decade, and usually happen to new players. This decade that player was Google. Next decade it may be, Facebook or who knows another new start up company. The level of talent, investment, and energy goes into start ups is many time higher that any single company could afford too.
So I need a CEO, who could find a stable value of Microsoft at above $100B. I do not need a CEO who is crazy to shoot at $500B. Because the risk is too high for everybody. It is high for investors, it is high for employees, and it is high for world to see a strong competitor in Microsoft go out of business.
It's true. Live labs got disbanded. No value there anymore!
Consider RE: Ballmer resigning:
One thing the economic crisis has proven is that CEOs have little impact on the health of their companies. Imagine sitting on top of a pile of managers who continuously tell you what you want to hear (and if you give the appearance that you'd like to hear tough truths, you'll hear a lot of made up tough truths, so that's no saving throw either), who sit on top of a pile of managers who... etc., all the way down to ICs who do the exact same thing (because it matters how MGMT sees you, not what you create) and you get an idea of how little you can do as a CEO.
Ballmer is not better or worse than anyone else, and he costs less to keep than to replace.
To: Thursday, April 09, 2009 11:23:00 AM
I appreciate that you want a CEO who might be a steady and deliberate hand and not someone who would intentionally flame out the company.
However, I think you are inferring a lot of planning on the part of our leadership if you think we got this way on purpose. Effect doesn’t always originate from assumed cause.
I bet we've come close to wasting 50 billion over the last decade via a combination of:
1. Tail chasing exercises like Live, Xbox, Zune, COI, WM, etc
2. Acquisitions that led to somewhere between zero return and complete write offs (remember the 5 B in cable)
3. Marketing fiascos – dinosaurs, Bill and Jerry, etc
By wasted I mean we spent money trying to make more money but ended up with less than we started with.
Add to that failed execution like LH, red ring of death, and a few other biggies.
Add to that failure to keep a pulse on governments who first threatened to take our money if we did not play by their rules and then did take our money.
Add to that a perpetual and publicly noted lack of vision around technology and economy – how many quotes have we heard from Steve on the impending failure of Apple or Google or tail de jour.
Then add opportunity costs – which I acknowledge you’ll have to make up on your own. Personally I like to pretend that:
1. Our biggest and best throbbing brains would have been kept around and rewarded handsomely to focus on what we are good at and we could still be firing on all cylinders in our core products
2. We could have taken that money and gotten what – 3% per annum interest? That seems easy.
One of the other readers can probably correct my numbers. I suspect the volume I’m considering wasted is listed very conservatively. If we hadn’t ruined all that money you then could have kept your statements, but our value would be close to double.
BTW – I like our new ads. Never thought I’d say that again because of our lingering suckage in this space. Please give whoever greenlighted these a big happy face on their next review. Then rapidly remove the instigators of the last 3-4 attempts.
Of my entire team that got cut (approx 11 blue badges and 11 contractors), one bluebadge got rehired. Two others got one loop each and then never heard back.
I saw the writing on the wall the moment we were handed our papers. I saw this huge batch of extremely qualified and experienced people dumped out on the local market all at once and knew that whatever these "internal jobs" were that they were blathering about in the layoff group meeting, it was just crumbs thrown at a mob to keep us quiet. I was not wrong. I and all the others on my team applied for every single job that we were matches for. I didn't get a word back on any of them. Most of my team did not either. Some of them were at MS for over a decade with awesome skills and a great attitude.
So, I went straight to external job hunting and was hired within a month to a new company. It has a surprising number of ex MS employees and its so strange to hear their negative stories. I had *loved* my team and I loved the work we were doing. I had drank the company koolaid all the way.
So, this whole "most people were rehired" thing...is bunk. Most people I know - the 10 fte's - were not rehired.
However, I think you are inferring a lot of planning on the part of our leadership if you think we got this way on purpose
We did not get this way on purpose. Neither did Windows, nor did Search. Things evolve and happen. What we could choose is whom to put at incharge so that evolution is correct. SteveB showed a lot of discipline by not going crazy with the success of Windows. Yes, good things were not planned, as not buying was was not planned, but it is still an outcome of a discipline. He always remained disciplined and offered what he believed is the right value for Yahoo. He always remain realistic and knew that Windows is a lottery. But Microsoft still has a good success rate, as Office, Tools and Servers showed.
Tail chasing exercises like Live, Xbox, Zune, COI, WM, etc
Generally speaking for big companies tail chasing is a safer bet than new businesses. If we had been pursuing new businesses, then you would have said, SteveB is an ass that he is running a company like a start up. Remember, SPOT watches? A huge growth requires coincidences, which come if the company throws a lot of pasta on the wall and see what sticks. There are not many successful companies which do so as a planned excercise.
Speaking from the MS "field", five people were let go out of my group, none were rehired and at least two are still looking. Seems to be performance-related but I am not 100% certain.
As far as new hires, yes, the bar has been lowered - way too low. I am continuously astonished that hiring managers either don't know how or are afraid to hire smart people.
I am continuously astonished that hiring managers either don't know how or are afraid to hire smart people.
I was in one of those race-to-the-bottom groups and saw this in action first-hand. The most qualified person to interview with our team got great feedback from those with whom he spoke, had reasonable salary requirements, and didn't get an offer. We guessed that it was because the manager saw him as a self-starter and therefore as a threat.
A similarly self-motivated individual with a great track record at MS, I was in round 1 of the layoffs in January. Some managers in big companies (not just MS) just can't abide perceived "competition" from staff who in reality aren't particularly interested in competing with them at all.
Last year, I added my own bit of value to the company. I introduced this individual to some of my connections within the company at groups that actually prized, rather than feared, technical talent and IC leadership. He was hired by the first group that put him through a loop, as I knew he would be. He, in a more decent group, still has a job. (No, I couldn't move there, myself, although I'd wanted to. My manager was one of those with the poor grace to hold me without recourse claiming perf issues just days after the pre-reorg prior manager gave me my most recent gold star, when that group had positions available. Sick.)
Based on everything I've been reading about the number of people in the 1400 who have been rehired, I've done a fairly extensive poll of people I know throughout the company over the last few weeks to try and get a better idea. I asked them how many people they knew personally who were laid-off, and who was rehired.
Number of people on people laid off: 97
Number of people who were rehired into different positions of that 97: 8
The people I've talked to have been from all over the company.
Mini, you're personal experience is not representative.
To the anonymous who said
"if we have MSFT anything above $10 today, is not by accident but by our talent, hardwork, and great leadership."
I wanna smoke what you are smoking.
Sorry to go off-topic, but it was reported today by Todd Bishop that MS has canceled the upcoming Pub in the new commons.
I agree with one of the comments on that article that this will have a negative impact on morale. I know a lot of people were looking forward to this. Seems like a good topic for mini to at least skim in a future post.
I wanna smoke what you are smoking.
Reality. I am smoking reality. You did not refute any of my argument. Tell me why should the work of a Microsoft's employee be 5 times more worth than the work of an IBM's employee?
Our stock had been hyperinflated, because investors see past performance as an indication of future profits. This is usually fine. But once in a while somebody due to luck or unluck end up at extreme positions for which the probability of repeating is almost zero by the same identities. Microsoft and Apple were two such companies. Apple future was underpriced, and Microsoft future was over priced.
Even at the current $20 a share, we have to beat IBM's talent for the next 2 decades to justify this $20 a share price. I would be happy if we could perform half of it. That is by 2019, I would be happy if the stock price is above $15 plus inflation. Sure there will be time when it will be much higher, and there will be time when it will be much lower. But any CEO who could keep it above $15 gets an A. Because if our investors see reality, and do not believe Micrsoft's employee is ten times smarter than IBM's employee, then we should be at $10 today.
BTW, just plot the graph of DOW with MSFT in the last 5 years, you would see the reality in your eyes. Unless you are stupid enough to believe that a dollar earned by tech company is worth more than a dollar earned by say a car company, a bank, or a retailer.
Tech companies are over priced. And now plot the same graph with Nasdaq, if you want to see Microsoft as a tech company. You would get a similar conclusion.
mini doesn't know any 1400 not rehired because mini is at a higher management level. The permanently shed among the 1400 are at IC level. "
Those engineers, who needs those; but managers, yea, we need more of those. You betcha."
You know what'd be way cool? An MSpoll asking employees if we have confidence in SteveB. Asking if CVPs pay should be 100% performance based. Asking if it made any sense to get rid of Manager feedback during MYCD. Asking if people should start traveling economy instead of Business with NO exceptions. The list goes on, but we need a poll that is willing to demonstrate that the emperor really has no clothes.
To the person who said " There might not have been an intact Microsoft if Steve were not CEO". The tragedy of this comment is that Steve has destroyed Microsoft in the past 10 years. The company exists, but the soul and passion of the employees has been wrenched out. The limbs as just joints that float aimlessly under the skin.
We've had stock price plummet. Don't blame the market. We NEVER went up for more than a few days.
I've spent a lot of time with Steve. He was genial, bright and passionate about the company. But that was when our stock price trajectory was up and up and up. Since 2001, he's trying every and failing. If I did his review, I'd be giving him a Underperformed/10 for the past 9 years.
The company exists, but the soul and passion of the employees has been wrenched out.
You know why so? Suppose the US economy starts heating up more than it should, as it was happening for last 6 years before this recession starts. What was the best thing, our friend Alan Greenspan could have done? Slowed down the growth. He kept interest rate too low for too long, causing all kind of unsustainable heat in the economy.
A company's economy is not different either. People do not like, but if I were a CEO of Microsoft in 1990's or were a CEO of Google in 2007, I would have issued as many new stocks as possible, until the things returned to the ground.
If Microsoft executive had done that, then keeping everything the same, our stock would have been higher today, or we would have been paid a higher one time dividend ($3 could have been $6). Yeah, the extra money we would have obtained in 1990's could have been used to take back those stocks today.
But it was not done. Just like when you buy back stocks when you believe your stock is underpriced, you should issue new stocks when you believe your stock is over priced. This is not only a good financial advice, e.g., could have prevented the repricing of Google's option recently, but it also keep employees moral high. Because no employee can perpetually keep up the heated growth.
Heated growth happens when you are a small drop in a big ocean. But the same heated growth will make you the entire ocean itself. If you had not kept the growth in check, you burn the moral of your employees.
Every CEO should, should try to keep stock price increase in check, unless it is being followed by fundamental. Our profits were half in ten years ago, but stock was three times (split adjusted) higher with fewer products. That is responsible that today's fantastic stock price, looks bad and decrease the moral. As I see it, our stock price is fantastic. Yes, it could have been higher if EU had not came into picture. Our 1998 stock price did not account for this. It was based on the assumption that Microsoft would be allowed to grow, at those rates until 2020. It was based on the assumption, that when one Window's mature, more Window like businesses would be found with 100% certainty. If the CEO of that time, was not willing to sign up for those super high expectation, he should have brought down the expectations, and also had made money for the long term stock holders by issueing as many new stocks as needed to bring down the expectation.
Do not blame the CEO for your crazy high expectation. I can bet that no other CEO was likely to have as much revenue, profit, and stock price as Steve Ballmer has. Yes, you are allowed to dream that there could have been better decisions, but those are in 20/20 hindsights. Oh man, last month somebody won a $100M lottery with number 123456, in 20/20 hindsight, I should have bough that number anc converted my $10 in to a Billion % gain!. Fine, but only in 20/20 hindsight.
Microsoft is still priced superb today, with $60B revenue, and kept dominations in its main businesses. Well, I would give SteveB 8 out of 10, i.e., a high achieve or a low outperform.
Here are some words to the online service group leaders:
Speaking of the layoff, it is widely believed among the devs that the whole adcenter development team middle management chain, from prinicipals to GM, should be laid off: such a regrettable group of incompetent and ass-kissing people, rarely any of them is of any merit: technical or moral.
The outcome is obvious: such a chaotic and poorly managed team, doing very little, but piling up hundreds of people, with of course a very questionable hiring bar.
to the reality smoker:
I really hopy you are good at writing software, because financial markets are not your bag.
IBM is a services company. Of course they will enjoy a lower multiple. If you think we are valued 10x IBM because the market thinks we are 10x smarter then I do want what you're smoking, because it sure ain't reality.
Mr Reality smoker
You really dont know the ABC of valuation of the companies do you? First of all right now IBM has higher multiple than microsoft. Microsoft is trading at 10 PE and that with over 25B cash. Msft is trading at almost 12 times cash flow. Show me another company not just microsoft with market cap over 150B trading so low. When was the last time you checked Microsoft's numbers? was it 1999? You talk about Microsoft employees' talent that got 20$ stock price. You gotta be kidding me. After nurturing Vista for 5 years, what did you get? A Frankenstein monster. Is this the leadership you are talking about? Windows and Office generate over 100% of Microsoft profit. Tell me the innovation done in Windows or Office in last 9 years? And what was your first argument? A company with revenues 60B can not maintain a market cap of 100B. Do you even know what you are talking about? I sure hope that you are not a Microsoft employee and if you are, you would make an ideal candidate for RIF in next round
I really hopy you are good at writing software, because financial markets are not your bag.
IBM is a services company. Of course they will enjoy a lower multiple. If you think we are valued 10x IBM because the market thinks we are 10x smarter then I do want what you're smoking, because it sure ain't reality.
This is precisely the point. Who is right, your financial market or my programming skills? The financial market got it wrong, if it thinks tech dollar is worth more than a service dollar. Of course, financial markets is under this realization for at least the last ten years. Please check out the relative earning multiples of Microsoft with IBM. You would realize that whether Microsoft earns a dollar of IBM, a dollar is a dollar. If you think another way, I would any day give you my dollar earned from Microsoft stock (say dividend) in exchange of 2 dollars anybody earned from its IBM stocks.
You could see it another way. The productivity of a Microsoft employee is not worth more than an IBM employee, then why should the Financial market assign a higher multiple to Microsoft? It is because, Microsoft won a lottery. Unless microsoft employee and investor accept this fact, they would remain in a disappointed state of mind, until Financial Markets done with its correction, which has been started 10 years ago. It should go further, unless we have a brilliant leadership of a person like Steve Ballmer. If we put somebody who goes with the naivity of the financial market and start believing that a tech dollar is worth more than service dollar, believe me, Microsoft would go below even $10.
FYI, I am not a developer. I advice, and a part of my job is to keep reality in picture.
Show me another company not just microsoft with market cap over 150B trading so low.
Show me another company with market cap more than $100B, with revenue less than $60B.
What you are not responding to my argument, that Microsoft profit margins are unsustainable. Get used to it.
These margins are sustainable only if the governments let us continue the way we were doing in 1998. Having high profit margings while also becoming mean there is something which causing it, which is also a cause of concern for the society, therefore high profit margins are not sustainable.
Last I check IBM has far more revenue than Microsoft, but has reasonable profit margins. You want your cake, and eat it too.
I know two FTEs that were laid off in January. Neither were rehired by Microsoft after multiple informationals for available positions. Both were ICs.
With the "focused" sacrifice (bottom 10%) more people start spending time selling themselves because they see that hard workers are invisible (thus become random targets). End result: lower productivity. Nice work this "bottom" 10% deal. But to wreck somones reputation over that....? Re-view, Re-taliation, Re-putation. Time to Re-invent?
Show me another company not just microsoft with market cap over 150B trading so low.
Show me another company with market cap more than $100B, with revenue less than $60B.
I had a typo here. Since the other person used 150B, I also intended to use $150B and not $100B.
Approximately a month ago this campaign stated that it would only post comments in regards to updates.
It was stated that the intention of the campaign was to use a tactic similar to Ironfire Capital. Owning less then 100 shares it rallied support for its "Plan B" for Yahoo and was instrumental in forcing the resignation of Terry Semel.
This campaign has obtained feedback regarding the "New Strategy" for Microsoft. A edited version has been posted on the campaign blog. It addresses numerous issues that are discussed within Mini.
A copy of the letter being forwarded to the Board of Directors is also posted on the blog. A copy of the letter to the Board and also the "New Strategy" are being forwarded to the Corporate Secretary to be presented at the annual shareholder meeting.
Numerous comments on Mini refer to the required resignation of Mr. Ballmer. The campaign addresses this issue and other issues to improve the company.
If Terry Semel can be forced to resign through a activist campaign there is the potential for similar results with Microsoft.
Please refer to http://thecrandreagoupr.blogspot.com
I like Microsoft in general. I think they have had some major problems in the past, mostly with trying to follow others rather than improve and add value (Xbox, Zune, etc). But there are plenty of places I think Microsoft can still do well, and I am certain that Microsoft will continue to make lots of money for at least the next 20 years. One place that I think Microsoft has done quite well is how wide/spread the .net platforms is, how all the different systems work together under this one framework, much better than presented by anyone else.
Everyone knows that Office and Windows are the big cash cows of Microsoft, and I fear a lot of times Microsoft is getting itself into trouble by just relying on the past successes of these two products, rather than really push the envelope. Something as fundamental as having the file-system based off a relational database model (like WinFS before it was scrapped), could really change how modern computers function. That is the power that Microsoft could wield, if it was daring enough.
As to the current situation, having some people laid off isn’t necessarily a bad thing, as long as its only a few % of the people (preferably the bottom few %). What I do find silly is the current “hiring freeze”. If you want to raise expectations or requirements etc. so that only the best of the best who are willing to work for far below what they are worth, that’s fine. To say “I don’t care how good you are, we cant hire anyone” is stupid.
What's with canceling the pub?
http://www.techflash.com/microsoft/Microsoft_cancels_plans_for_on-campus_pub__42823757.html
I don't drink but I am all for going to a bar to eat and hang out. Who's behind this?
FOR AN OLDER POST: Actually the problem on layoffs is far worse...a lot of the people who were let go have figured out that it is much better to 'game' the system and come back as contractors and bill MSFT tons of money. There is rampant abuse by companies like Prime 8 that are nothing but ex-Microsofties that add little or no incremental value who are back working here. If you are an exec at Microsoft (and as an employee and shareholder I hope you are), you need to call out companies like Prime 8 for their crap!
Mini, you should be happy. One of the people cited in the NY Times article by Julie Bick is Corey Salka. That is an example of someone that worked at Microsoft for 17 years, and never produced anything.
Meanwhile, the problem of non-layoffs, even the "I will be back" kind of, is still happening. Anyone got the impression that the Windows Mobile team is being inflated by people that otherwise would - and should - have been sent away?
Now, in as much as I like Win7 and Office, calling those examples of good engineering cannot be serious. Windows Vista was a joke, and removing some of the bloat doesn't make Win7 great, but just a return to the Windows XP SP2 level of quality. Meanwhile, Office is becoming a joke now: company after company is avoiding the "ribbon fiasco". Didn't you cited yourself the problems of the internal review system, which should be the only system in the world using InfoPath?
Exceptional performer blah blah, mediocre talent blah, superstar free radical this and that.
It is painful to see the success of groups and products depend so much on how many superstars they have. Where is the vision? Management? Strategy?
Read The Mythical Man Month. Your entire team should only need one superstar developer--the architect--who has the talent, experience, authority, and vision to deliver a quality product even if every single other person on his team is below-par.
I think it is crazy that teams would even want more than one superstar dev (waste of talent) or that they would want to fire their mediocre hires instead of use them to do the easy work.
"As to the current situation, having some people laid off isn’t necessarily a bad thing, as long as its only a few % of the people (preferably the bottom few %)."This was absolutely not the case -- we lost a number of strong performers, many of whom are now at competing companies.
It would have made sense to layoff the bottom 10%, but we never make sense.
Oh do I love triumphant return emails.
/sarcasm off
Mini, I think you should reconsider the unmoderated CRF streams.
Have you been reading the garbage coming through there? Given the press your blog receives, this seems to be asking for trouble.
no pub just reinforces the view that MS is a lot of things, but "the" cool employer no more...it was THE place in the 90s when I did my college internship - what happened to the program it didn't even make the top 50 this year?
More layoffs coming....Just heard that the next round is 4/23 when we announce our financials. Hold on to your hats.
what's funny is how MANY managers inside microsoft use iPhones as their current phones:)
I always tend to give benefit of doubt to top management because they have a different view on buisness than most of us. Even stuff that might seem downright stupid to us makes a lot of sense up there. But coming up with an idea like Zune and then calling it an "ipod killer"....come on SteveB et al, seriously!! i know this is old news, but it gives an insight as to how MS went haywire with it's cash. The only sense Zune made was that Bill and Steve wanted to have another go at Steve Jobs and prove to him once and for all that Apple is dead. That was not be, Mr. Jobs, marketing genius that he is came back with a bang as if in a synchronized move with GOOG leaving Bill and Steve scrambling for cover. Cash is hot and SteveB has a big ego of 90's era when MS crushed pretty much everything that came in it's way. SteveB needs to tame his ego and tame it fast else he will go in the same fashion as all the big
e-goers :) go
I like Free Radicals. I like them so much. I'm a new guy (got shifted between my internship and my start day) and my group makes me sad. If there was still mobility I would feel a lot better spending the next few months working on my stuff.
(whoops, forgot to add)
I knew thirty from a small project; maybe 15 got cut. Still 5 or 6 of them looking.
I'm just lucky I was between the internship and the first day as an FTE when they announced the cuts.
Wait, but Microsoft doesn't favor the young cheap'ns, right?
Seriously, my old manager was twice the engineer of most others I've seen (coding more than the rest of us despite managerial duties), with a family and a house, and he was fired. Thank stars he found another good job.
So, yeah, the 1400 are out there.
Should Steve be fired?
Yes, in a soft and slightly dignified way.
Ah hell, yes either way. So sad.
average hires at best describes Microsoft problems. I was at MSFT from 93-2005. In my early days the halls with filled with smart driven SOBs when I left the halls where filled with a bunch of average, yes men/women who only cared for themselves and didnt have a fing clue about MSFT products. Whn I had to explain to a person how to create an autosignature...I decided it was time to leave. Hope the ship gets righted soon.
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