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Large Round of Layoffs Expected at Microsoft

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Re: Large Round of Layoffs Expected at Microsoft

#71
post #24
post #13

Never good news to hear about layoffs, but for those that are affected I can say there is life beyond Microsoft. (it might even be better!)

Microsoft employee here. My main concern is the fact that I'm the US on an H-1B visa. I really, really, really don't want to go back to my country, but that will be the case if I'm laid off and unable to find another H-1B sponsor in a very short time. :(

This is the #1 reason why I won't stay in the US after my phd. I have no interest in being a random CEO whim away from either having to uproot my life and move back home or frantically try to land a new job all in the short period of 15 days.

For those curious the #2 reason is that H1Bs make it hard to do even simple extracurricular activities like writing books or do consulting on the side related to an open source project you contribute to let alone start a company.

The H1B is fundamentally broken and I'm amazed that so many people put up with it. Credit to the US for being such a desirable destination, I guess.

Re: Large Round of Layoffs Expected at Microsoft

#72
post #53

Earlier quoted context omitted.

and who selects the ones to fire? The ass-kissers of course.

Exactly. Every layoff i have seen personally or through close friends at other company's the ass kissers survive and those t hat threaten them get laid off. Those that threaten them (the competent ones) are always painted as non team players because generally the competent ones are unhappy when the teams gain so many slick talking ass kissers but few doers.

Companies should lay off products, not people. How can a company expect to support the same products with fewer people? The hoped for efficiencies from laying off the "dead weight" are probably small. The company should kill its loser products and focus on its winners. "More wood behind fewer arrows."

Michael O. Church wrote more about this in a recent blog post:

http://michaelochurch.wordpress.com/2014/06/11/why-corporate...

Re: Large Round of Layoffs Expected at Microsoft

#73

Any company that has been around for as long as Microsoft, has a huge amount of dead weight in its mid-level management. I mean people whose main skill is mastery of the internal political process. Lest people think I'm singling out Microsoft specifically, this same problem is present at Google as well, but is less of a problem because Google has not been around long enough to pick up the same amount of dead weight p…

This is why I believe in a Semco type culture where every team member receives a cut of the profits and there is a peer review process of who gets to join / stay in the team.

It's the most realistic way a profitably franchise can avoid taking in the political rent seekers. What you spend more on profit share you probably make back on cost savings, and at the very least it buys you a more happy, productive workforce.

Re: Large Round of Layoffs Expected at Microsoft

#74
post #23

Earlier quoted context omitted.

USA Today ran with a prediction of 5-10% of Nokia staff, around 12,000 to 25,000 employees.

The nokia acquisition only brought in about 20k headcount, so one of those numbers can't be right.

The GP's statement could be parsed as meaning there are 12,000 to 25,000 Nokia employees and 5–10% of those could be laid off.

Re: Large Round of Layoffs Expected at Microsoft

#75

Earlier quoted context omitted.

To provide a counterpoint: Enron collapsed under massive fraud and GE would have been bankrupt if they had to mark-to-market their debt during the financial crisis.

What does it mean that they would have been bankrupt? I thought (wrongly perhaps) that you were only bankrupt if you couldn't pay your bills. So no matter their true debt back then, doesn't GE's current existence prove they weren't bankrupt?

If your assets are worth less than your liabilities, you're technically insolvent. If you can still pay your bills from cashflows, you don't need to claim bankruptcy, but on a long enough timeline without a significant change, you will go bankrupt. There was a long stretch of time post-GFC where this was the case with GE.

Banks have to 'mark-to-market' their debt periodically, but since GE wasn't a bank, they didn't abide by the same regulations. Say there were two identical houses on a street with $500k mortgages, but the market crashed, the houses are worth less, and only 1/2 of the mortgages will be repaid. If Bank of America owned the first house, the mortgage asset (it's an asset to the bank) would be marked-to-market and what was formerly a $500k asset would now be worth $250k, and the bank would show a loss of $250k.

GE doesn't have to do this and could carry assets at their previous value (and didn't have to mark down bad debt either). To simplify the story, during the GFC, GE had that one mortgage "worth" $500k and debts worth $400k. If they were a bank, they would have had to admit that the mortgage was really worth $250k, and they would've gone into receivership.

If not for that accounting quirk and the massive amount of bailout cash they took from the Federal Reserve / FDIC, they would have actually had to declare bankruptcy. Ironically enough, the FDIC program and Federal Reserve are to shore up banks and GE was explicitly not a bank per the above few paragraphs. So make sense of how they got access to bailout money solely authorized to bail out banks..

[1] - $45B in losses buried on GE's balance sheet: http://www.businessinsider.com/henry-blodget-living-on-plane...

[2] - GE borrowed $16B from Federal Reserve: http://www.propublica.org/article/general-electric-tapped-fe...

[3] - FDIC to back $139B in GE Capital Debt: http://dealbook.nytimes.com/2008/11/12/fdic-to-back-139-bill...

[4] - GE Borrows $59.3B from FDIC program: http://www.bloomberg.com/news/2010-12-01/ge-borrowed-16-bill...

Re: Large Round of Layoffs Expected at Microsoft

#76

Interesting how this will impact the job market on the West Coast. You'd think that 5-10k people in IT would quickly fill a lot of the currently open positions.

I work in silicon valley and it seems like there is a huge shortage of people with software development skills. I am not talking about geniuses, just people with skills. I work at a company that isn't the sexiest (but a good stable employer) and man, it is hard to find people.

if you're having trouble hiring people at the market rates, you need to revisit your assumptions (at minimum, the one about paying market rates)

Re: Large Round of Layoffs Expected at Microsoft

#77

Any company that has been around for as long as Microsoft, has a huge amount of dead weight in its mid-level management. I mean people whose main skill is mastery of the internal political process. Lest people think I'm singling out Microsoft specifically, this same problem is present at Google as well, but is less of a problem because Google has not been around long enough to pick up the same amount of dead weight p…

Facebook does indeed have a very efficient corporate structure (whether that will last is another question). Perhaps 7,000 to 7,300 employees (assuming some pickup the last quarter or two), and $8.9 billion in sales. Microsoft by comparison had roughly 15,000 employees when they had that level of revenue (adjusting for inflation), circa 1993 / 1994.

Let's be honest, Facebook has a much more efficient product, and by that I mean the product does most of the work for them.

Re: Large Round of Layoffs Expected at Microsoft

#78

Any company that has been around for as long as Microsoft, has a huge amount of dead weight in its mid-level management. I mean people whose main skill is mastery of the internal political process. Lest people think I'm singling out Microsoft specifically, this same problem is present at Google as well, but is less of a problem because Google has not been around long enough to pick up the same amount of dead weight p…

Facebook does indeed have a very efficient corporate structure (whether that will last is another question). Perhaps 7,000 to 7,300 employees (assuming some pickup the last quarter or two), and $8.9 billion in sales. Microsoft by comparison had roughly 15,000 employees when they had that level of revenue (adjusting for inflation), circa 1993 / 1994.

Is it really that black and white to compare the size of engineering teams 20 years apart?

Re: Large Round of Layoffs Expected at Microsoft

#80

Any company that has been around for as long as Microsoft, has a huge amount of dead weight in its mid-level management. I mean people whose main skill is mastery of the internal political process. Lest people think I'm singling out Microsoft specifically, this same problem is present at Google as well, but is less of a problem because Google has not been around long enough to pick up the same amount of dead weight p…

I have begun wondering lately if the reasons for the inevitable death of living things has any anologue to the dynamics you describe here for corporations.

The BCG matrix. Microsoft is in the Cash Cow stage and moving to the Dog stage.
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