
Large Round of Layoffs Expected at Microsoft - davmre
http://bits.blogs.nytimes.com/2014/07/16/microsoft-layoffs-expected-thursday
======
TheMagicHorsey
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 personnel.

The first generation of people at a company were fighting for market, and they
rose due to their ability to deliver value to colleagues and customers. But
when a company becomes successful, the resources available to teams within the
company becomes somewhat decoupled from company revenue. Soon, political skill
becomes as important or more important than impacting the company's bottom
line.

Microsoft and Intel alumni in the late 90s used to tell me that they knew
managers whose main goal was to grow the headcount under them, in order to
grow their own prestige.

Today at Google you can see some of this same behavior in its nascency. Most
of the deadweight is outside Engineering teams because its hard to bullshit
when you have to deliver a product. Still, there are peripheral functions like
business development, marketing, intellectual property, privacy, policy, etc.,
where you can always find a few deadbeats that talk slick, but don't seem to
have much to show for their time except hiring more people and making a few
high impact appearances at meetings. You can go a long way if you can talk the
talk, look the part, and kiss the right asses.

Microsoft has been picking up useless deadbeats for nigh on 25 years now. They
really need to shed these people.

One company you have to admire is Facebook. I don't know if its true, but I'm
told you basically get fired at Facebook in the first year if you don't know
how to deliver something of tangible value within that time. That is hardcore.

If that metric was applied at Microsoft and Intel, you'd see the companies
shedding 25% of their workforce immediately.

I suspect even Google would shed 10-15% of its people.

~~~
adventured
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.

~~~
ams6110
But Facebook is in a much more tenuous position. Nobody really needs Facebook;
it's mostly entertainment and could be toppled in a few years time by the next
internet/tech fad. Microsoft is a lot more entrenched in a lot more places
that actually depend on their software.

~~~
tomjen3
Facebook is entrenched because that is where all your friends are. G+ is much
better (circles are really nice), but what does that matter when your friends
aren't there?

------
outside2344
Microsoft employee here. This is great news - we have so much duplication and
layers. Anything to reduce the bloat and increase agility is great news.

There is a lot of great news at Microsoft these days - great place to be -
hope I'm around after tomorrow!

------
chc
I wonder how much of Nokia is going to get rejected. A friend of mine is a
former Nokia employee who was really psyched to be working on the Surface team
now — that would be pretty rough if that team got laid off just after getting
settled into the company.

~~~
yulaow
On zdNet they say that 1/5 of ex-Nokia workers in Finland could be axed [
[http://www.zdnet.com/one-in-five-ex-nokia-workers-in-
finland...](http://www.zdnet.com/one-in-five-ex-nokia-workers-in-finland-
could-be-axed-as-microsoft-prepares-layoffs-7000031667/) ]

Personally I think it will be even more

~~~
sirkneeland
As a current Nokia employee (didn't transfer to Microsoft) it pains me to hear
this.

But on the plus side, Nokia Technologies is hiring...

------
bhouston
Are they just going to make teams leaner (with less features in the next
release) or are they going to be cutting projects/products?

I'd like to see a narrower focus from Microsoft towards things that have nice
growth trends. But I guess for strategic reasons Microsoft has to continue to
fund its Mobile OS division, even if it doesn't gain much ground on Android,
iOS.

PS. [http://bgr.com/2014/07/01/windows-phone-market-
share-3/](http://bgr.com/2014/07/01/windows-phone-market-share-3/) Windows
Phone market share is dismal and shrinking.

------
tdicola
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!)

~~~
cesarbs
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. :(

~~~
microarchitect
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.

~~~
seanmcdirmid
Well, what if you are in another country working for a company (say Microsoft)
on a visa, even though you are American.

> 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.

There are plenty of countries with more broken visa policies (I've lived here
for almost 8 years and still don't qualify for permanent residency).

~~~
kelnos
I know people who have lived in the US easily that long and are still stuck on
H1B.

Countries with worse policies are no excuse for the embarrassment that is the
state of US immigration.

~~~
seanmcdirmid
You can only be on a H1B for 6 years (3 years renewed twice). After that, its
either greencard or go home for a few years, and everyone I know has been able
to get greencards even if the "process" is kind of tough.

However, I cannot get a greencard in the country of my residence (where I have
many coworkers with USA greencards, ironically enough), so I think it is not
very fair.

~~~
cesarbs
You can stay longer than 6 years if you have a pending Green Card application.

~~~
seanmcdirmid
Yes, but your GC application has to basically be approved by that point, and
you are just waiting for a slot.

------
yawaramin
Well, I have to say after reading the Monday Note piece decoding Satya
Nadella's public email to the employees:
[http://www.mondaynote.com/2014/07/13/microsofts-new-ceo-
need...](http://www.mondaynote.com/2014/07/13/microsofts-new-ceo-needs-an-
editor/)

... This doesn't come as much of a surprise. His main message seemed to be
'Shape up or ship out.'

------
PaulMest
Context: I was at Microsoft during the first and only round of layoffs in
company history (2009). My job was not impacted at all by the layoffs so I
speaking from my memory of what was happening around me. In fact, I was
working on an incubation project that was one of the few ideas that was green-
lighted with a pretty sizable team that year.

My perspective: From a company perspective, eliminating 5000 people in 2009
was a great idea. It was (and is) a huge company so it probably could have
been more. However, the layoffs in 2009 were seriously botched. Many
organizational best practices were violated.

Microsoft made an announcement saying that there would be ~5000 layoffs and
that they would be completed over the following 18 months. This timeframe is
too long! Layoff best practices say: cut deep and cut fast. Get rid of the
people that have to be let go, treat them as well as you can on the way out,
and then show some serious TLC to the employees you want to retain and rebuild
your culture and trust with the people who stick around. Don't let the entire
company live in fear for 18 months!

As much as the stack rank was a thing at Microsoft in those days, even if you
were the lowest ranked employees for 2 years, Microsoft was hard-pressed to
actually fire anybody. Even during this time of layoffs, Microsoft decided to
divest in many businesses/products and chose not to eliminate people based on
performance.

For example, they shipped one last version of MS Money and then the whole team
was RIF-ed. Everybody on that team would get ~2 months to interview and find
other jobs in the company otherwise they got a generous severance package and
were no longer employed. Combine this with the fact that many Microsoft teams
had recently restricted their headcount, it was relatively more difficult than
it ever had been to find a job within the company.

The divesting strategy was interesting and it probably would have been a good
way to do massive position elimination except that not all final versions of
products were aligned to ship in the same timeframe. So anybody working on
small-ish or lame-ish products had a fear for many many months that after
shipping their current product, they would be out of a job. IIRC, this
strategy of divesting took about ~12 months instead of the 18 months they
originally announced before they provided comfort to the employees that the
layoffs had completed.

This was also during the economic downturn of 2008 so there was extra angst
from people who lost their job because they had just lost a lot of their net
worth from a seriously depressed market. Morale suffered. Lots of good people
defected to Amazon, Facebook, Google.

This time around, I hope Microsoft does a better job of keeping the timeframe
for cutting to a reasonable period of time like 1-2 months. Unfortunately,
even if you make it through the layoffs and feel secure that you have SOME
JOB, you'll probably not really know WHAT SPECIFICALLY you're working on until
all of the re-orgs play out. This is colloquially known as re-org hell.

Best of luck to the people impacted. It's a relatively better market this time
around. If any of you make it to San Francisco, I'm happy to grab coffee or
give you pointers on some cool companies looking for great people.

~~~
tdicola
The other botched part of that 2009 'downsizing' was that everyone who was
left didn't get a bonus, raise, etc. right as silicon valley was firing up and
other big & small tech companies were hiring like crazy. A year or so later
and attrition was _massive_. Things got so bad there was an emergency ~10%
raise for everyone in engineering, and large bonuses for mid-level folks. The
controversial review system that was barely a year old was scrapped entirely
and reverted to the old system. It was very, very weird and seemed like a move
of desperation.

For anyone left after this round of layoffs, it might be worth looking around
to greener pastures come August when reviews roll out. If you're in a strong
position I strongly suspect the company would bend over backwards to try to
keep you around amid the mess.

------
akurilin
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.

~~~
georgeecollins
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.

~~~
dagamer34
Honest question as a developer looking eventually to move to the Valley in a
year or so: is it really that hard to find good people? Is software
development really that hard? I taught myself 99% of what I know and found it
to be pretty easy, and currently do iOS dev work. Just wondering.

~~~
eru
There's enormous demand for good people globally. The price at which demand
meets supply is pretty nice for employees these days.

~~~
pestaa
Depends on the country, to be fair. I could earn 10 times more if I could just
bite the bullet and relocate to west.

~~~
eru
Or East. Singapore, Hong Kong and Australia pay well, to name a few.

------
quaunaut
Microsoft was made significantly flatter today, so hearing there is indeed
going to be layoffs isn't surprising, though I admittedly hoped they'd figure
out how to do it without incurring so many layoffs.

~~~
X-Istence
Where is more information about Microsoft having been made flatter?

~~~
kevin_thibedeau
They had a vague announcement about organizational changes a few months ago to
a "flatter" hierarchy. It was the first hint of the layoffs that have now come
to fruition.

------
cpplinuxdude
"The deepest cuts are expected to come from the businesses the company bought
from Nokia several months ago"

Will that affect Qt?

------
arthurcolle
I guess this means between 7000-9000 layoffs based on the crude calculation
600M/(60,000 ~ 75,000)~ approximately

~~~
localhost
If the goal is 600MM / year in savings, your denominator is off by quite a
bit. Fully loaded cost of an employee is significantly higher than 60-75K. Try
3-4x that amount.

~~~
ryanburk
you should assume ~200k for an engineer in a market like seattle

~~~
72deluxe
In what languages? Obviously location is important but I am writing C++ on
multiple platforms in the UK and $200k is far away.

~~~
bmj
I don't believe the parent is referring to the salary of the employee, but
rather the overall cost to the company for that employee.

~~~
ryanburk
this. what a company budgets for the average full cost of an employee per
year. so someone who makes $100k and someone who makes $225k in their own
salary all average out to $200k when you take salary cost + insurance costs,
401k, perks, overhead, etc.

------
crypto5
Did they essentially fire 5k with stack ranking annually before?

------
known
Companies ruined or almost ruined by imported Indian labor (US)
[http://sammyboy.com/showthread.php?98021-Companies-ruined-
or...](http://sammyboy.com/showthread.php?98021-Companies-ruined-or-almost-
ruined-by-imported-Indian-labor-%28US%29)

~~~
ctrlaltkill
That thread got very racist very quickly. I don't know if it's intended to be
satire, but it conflates a lot of issues and blames it on Indians. AIG and
Lehman, for example, collapsed due to very different reasons.

~~~
known
[http://business.rediff.com/report/2009/sep/24/indians-
among-...](http://business.rediff.com/report/2009/sep/24/indians-among-most-
corrupt-while-doing-business-abroad.htm)

------
ulfw
How can you fire 18,000 people without seriously disrupting your business (not
even considering loss of morale, angst, good employees running away or getting
their resumes ready). But just logistically. How do you decide who those
18,000 are? Just random? How do you know which are 'expendable' or the 'bad
Apples'? When you are talking this size, I doubt that is even possible.

~~~
TallGuyShort
It's impossible for 1 individual, but if it's as "strategic" as the letter
says, then it was probably done to specific departments by specific amounts.
That'll filter down and the final, specific decisions probably get made at
much smaller scales. There's certainly going to be some sub-optimal decisions,
though.

------
anoothrowaway
As someone starting at Microsoft in the near future, should this make me
worried?

~~~
TallGuyShort
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 all this and hard to contact. Eventually
I found out the entire department was gone and I was going to work on mobile
apps and web pages instead of highly scalable backend infrastructure and
distributed databases. I also found out they had intentionally hid this from
me, so I immediately told them I would not join the company. I don't share
this to scare you or suggest Microsoft would do the same, but understand that
you are entitled to have your questions about your standing with the company
answered. Pay attention to who they let go, and question how well that bodes
for your goals at the company. If they can't or won't help you understand
this, understand the risk you're taking. As I've said elsewhere in this
thread, layoffs can be a sign the company is doing what it needs to for the
future if it's done correctly.

~~~
TallGuyShort
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 engineering staff, they shouldn't have been hiring
less-experienced employees anyway. That doesn't seem to be the case in
Microsoft's specific situation with Nokia, though.

~~~
anoothrowaway
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!

------
fu9ar
Raise your hand if you saw that coming when Android and Apple beat Microsoft
to the punch in the global mobile market, and then kicked them a few times
while they were down, and then laughed about it.

~~~
mynameisvlad
Yeah, I doubt this has anything to do with mobile. Microsoft has a lot more
technologies than mobile. This has way more to do with the insane hierarchical
structure they have in place.

------
tphan
I knew Microsoft was on the way out but I didn't know the situation was so
bad. Hopefully those who lost their jobs will find a place at Google or Apple.

~~~
TallGuyShort
Layoffs are a sign that a company has been struggling, or has been slowing, or
has grown disproportionately in personell, but that someone is doing something
that probably needs to be done. It is not always the solution, but it is also
not a sign of ultimate doom.

~~~
Spooky23
From what I've heard, if you're not working on cloud services, you're a
dinosaur.

They just let go of XP and cloud services are making the need to support
office version X for 10 years less relevant. MS must spend a ridiculous amount
of time & treasure supporting old crap.

~~~
neutronman
They sold Windows 3.1 until the year 2008. I would agree that they spend way
too many resources on the past.

[http://en.wikipedia.org/wiki/Windows_3.1x](http://en.wikipedia.org/wiki/Windows_3.1x)

~~~
kevin_thibedeau
They still sell embedded DOS. Supporting legacy products is good customer
service. It's not like they were spending tons of resources to maintain the
code.

------
justizin
[http://www.luimbe.com/wp-
content/uploads/2011/05/photo.edit_...](http://www.luimbe.com/wp-
content/uploads/2011/05/photo.edit_.community.magnitude.jpg)

? :/

