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Large Round of Layoffs Expected at Microsoft

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Re: Large Round of Layoffs Expected at Microsoft

#231

Post by camperman »

kamaal wrote: post #132
greendestiny wrote: post #101

Earlier quoted context omitted.

When whom to layoff is a political decision, layoffs will just compound the problem.

That always happens. The problem is the CEO needs an internal partner to get a list of people who need to be let go. And that's generally delegated to the immediate exec staff, they delegate to some layers below and when the list is built, it bubbles up back to the CEO. In the process, most people think performance is the key to decide who stays and who leaves. While the fact is first ones to go are political enemies…

"The problem is the CEO needs an internal partner to get a list of people who need to be let go."

Prepare three envelopes...

Re: Large Round of Layoffs Expected at Microsoft

#232

Post by sp332 »

samirmenon wrote: post #192
wavegeek wrote: post #144

Earlier quoted context omitted.

> And it's not just tech. It also applies to countries. Look at the increasing resources that go to people who produce little or nothing of value to others eg lawyers, lobbyists, politicians, financial engineers, LBO operators etc. Not to mention many of the people on welfare.

You're saying that lawyers and politicians provide little or no value to others? Don't democracy and a fair legal system require good lawyers and politicians?

Sure, and companies might need some middle mangers. That doesn't mean none of the middle managers, lawyers, and politicians are dead weight. This latest session of Congress has been historically unproductive, passing fewer than half as many bills as the previous record set in 2013.

Re: Large Round of Layoffs Expected at Microsoft

#233

Post by sokoloff »

sp332 wrote: post #232
samirmenon wrote: post #192

Earlier quoted context omitted.

You're saying that lawyers and politicians provide little or no value to others? Don't democracy and a fair legal system require good lawyers and politicians?

Sure, and companies might need some middle mangers. That doesn't mean none of the middle managers, lawyers, and politicians are dead weight. This latest session of Congress has been historically unproductive, passing fewer than half as many bills as the previous record set in 2013.

With apologies (and a tip of the hat) to Mr Gates, I posit that measuring the progress of Congress by the quantities of bills they pass is roughly analogous to measuring the progress of airplane design by its weight.

Re: Large Round of Layoffs Expected at Microsoft

#234

Post by mikeyouse »

clarky07 wrote: post #145
mikeyouse wrote: post #75

Earlier quoted context omitted.

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…

> If your assets are worth less than your liabilities, you're technically insolvent. No you aren't. It just means you have a negative net worth. insolvent - unable to pay debts owed. Think of people instead of companies. I suspect a majority of people in America have a negative net worth. That doesn't make them insolvent. It just means they have lots of college loans and they are working to pay them back.

Barrkel's got it right. At least in accounting terms, companies aren't people and your college loans don't have covenants that allow the debtholder to liquidate assets.

The world of corporate accounting is very literal. 'Technical insolvency' is a synonym for balance sheet insolvency, while the inability to pay a debt is 'cash-flow insolvency'. You can have either type, both, or neither depending on circumstances.

GE at the time would've still been cash-flow solvent, however they had tens of billions of dollars in debt coming due that likely would've forced them into cash-flow insolvency without taxpayer money.

Re: Large Round of Layoffs Expected at Microsoft

#235

Post by clarky07 »

barrkel wrote: post #180
clarky07 wrote: post #145

Earlier quoted context omitted.

> If your assets are worth less than your liabilities, you're technically insolvent. No you aren't. It just means you have a negative net worth. insolvent - unable to pay debts owed. Think of people instead of companies. I suspect a majority of people in America have a negative net worth. That doesn't make them insolvent. It just means they have lots of college loans and they are working to pay them back.

http://www.investopedia.com/terms/a/accounting_insolvency.as... A situation where the value of a company's liabilities exceeds its assets. Accounting insolvency looks only at the firm's balance sheet, deeming a company "insolvent on the books" when its net worth appears negative.

you added an adjective to the term :-) Yes you can call them insolvent if you want to, but it doesn't mean anything if they can still pay their debts. If the number keeps going down it is certainly a problem, but if it heading back up it is fine.

The housing crisis is a perfect example of this. It only became a problem for people who bought more house than they could afford with hopes of selling at a moments notice. My house was as much as 50k underwater (going based on foreclosure sales of identical townhouses) during the crisis. Fortunately, I didn't buy more house than I could afford. I could easily continue to pay my mortgage each month and was never anywhere near bankrupt. I sold the house recently for closer to 10k loss. Was I insolvent when the house was down 50k? No.

[1]Cash flow insolvency involves a lack of liquidity to pay debts as they fall due. Balance sheet insolvency involves having negative net assets—where liabilities exceed assets. Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.

[1] http://en.wikipedia.org/wiki/Insolvency

Re: Large Round of Layoffs Expected at Microsoft

#236

Post by wahsd »

TheMagicHorsey wrote: post #18

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…

LOL The irony of someone getting fired at Facebook for not delivering something of tangible value is so juicy.

Re: Large Round of Layoffs Expected at Microsoft

#237

Post by cesarbs »

woi13 wrote: post #226
ambrood wrote: post #84

Earlier quoted context omitted.

Hang in there bro. I got laid off on H1-B last year. While technically you become "out of status" on the day you get laid off (severance and payroll doesnt matter), you can stick around for a reasonable amount of time to find a new job. The strictest interpretation for that time is 10 days but I know folks who took 2 months. Good luck!

this is wrong advice. Don't do this. If DHS gets notified you will kicked immediately and put on ban to US entry for 1 to 3 years depending on offence. Read story of girl from Mexico ( techie girl) who overstayed.

Do you have a link to that story?

Re: Large Round of Layoffs Expected at Microsoft

#238

Post by thearn4 »

mcguire wrote: post #223
thearn4 wrote: post #205

Earlier quoted context omitted.

This describes working at NASA down to a T.

Hey! Don't tell people that! We build rockets! And all of our software has to be manned-flight-rated! (Including people.nasa.gov!)

Writing a one-off throw away analysis script? Better consult NPR 7150.2A and matrix it correctly!

It's not about safety. It's about checking of a box and satisfying a process.

Re: Large Round of Layoffs Expected at Microsoft

#239

Post by mikeyouse »

clarky07 wrote: post #235
barrkel wrote: post #180

Earlier quoted context omitted.

http://www.investopedia.com/terms/a/accounting_insolvency.as... A situation where the value of a company's liabilities exceeds its assets. Accounting insolvency looks only at the firm's balance sheet, deeming a company "insolvent on the books" when its net worth appears negative.

you added an adjective to the term :-) Yes you can call them insolvent if you want to, but it doesn't mean anything if they can still pay their debts. If the number keeps going down it is certainly a problem, but if it heading back up it is fine. The housing crisis is a perfect example of this. It only became a problem for people who bought more house than they could afford with hopes of selling at a moments notice.…

The quote of mine that you first replied to was:

> If your assets are worth less than your liabilities, you're technically insolvent.

Which you disagreed with. It's a literal, factual statement though.

> Yes you can call them insolvent if you want to, but it doesn't mean anything if they can still pay their debts.

It actually does mean something in corporate finance.

> Was I insolvent when the house was down 50k? No.

Stop comparing corporate finance to personal finance, they aren't remotely similar. The only reason that the phrase "Technical Insolvency" exists is because there are consequences if companies breach that threshold.

From the Title 11 of the US Bankruptcy Code[1]:

    The term “insolvent” means—
    (A) with reference to an entity other than a partnership and a
    municipality, financial condition such that the sum of such
    entity’s debts is greater than all of such entity’s property,
    at a fair valuation
This isn't just parsing terms for fun, contract law relies on US Federal code, which has definite consequences for insolvency. All commercial loans come with a plethora of 'loan covenants' that mandate certain actions based on a company's health. Common covenants include coverage ratios, debt/equity ratios, times-interest earned ratios, etc. Technical insolvency would've breached many, many covenants.

If a loan covenant is breached, the debt-holder can demand additional collateral and in some cases, they can demand full repayment of their outstanding debt. At the time, GE had ~$90B in cash/investments and over $300B in current debt. A fire-sale on those assets to pay off that debt load would have killed GE.

[1] - http://www.law.cornell.edu/uscode/text/11/101

Re: Large Round of Layoffs Expected at Microsoft

#240

Post by anoothrowaway »

TallGuyShort wrote: post #207
TallGuyShort wrote: post #188

Earlier quoted context omitted.

It should make you cautious and curious. A few years ago I accepted an offer from a large company who announced massive layoffs in the near future. I contacted my recruiter and asked if this affected my offer and they said no. I later pushed them for more details about who I would report to, if I could speak with a member of the team, what I should do to prepare, and what I would work on. They were very closed about…

One other thing I would add to this is that I believe there are legal problems if they were to revoke a job offer in a situation like this (what I heard - IANAL). Keep in mind that an obligation to still hire you may mean you're walking into a situation where they no longer wanted to hire you. In my case, people I went to for advice kept pointing out that if the company was making such a drastic cut of their engineer…

Well the good news is that right before I was about to write emails to my recruiter and old boss, I got emails from them saying that all is well with my current placement. What a relief!
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